NAMA gets EU approval

[FB2]

So not looking good for the long term prospects for NAMA if the Commission decides to enforce the engagements as to market price and transparency.

Best news in a while I would have thought. If the 17Bn bullshit figure will be transferred in the next few weeks then we will see what Europe think of that and can extrapolate any correction to the 54Bn.

[yoganmahew]

@FB2

So not looking good for the long term prospects for NAMA if the Commission decides to enforce the engagements as to market price and transparency.

Best news in a while I would have thought. If the 17Bn bullshit figure will be transferred in the next few weeks then we will see what Europe think of that and can extrapolate any correction to the 54Bn.

Nah, not safe to do so. For all that the big developers are hopelessly bust, they have better sites and better half-built stuff than the rest… you could only extrapolate down…

[maryocarol]

The Commission will appreciate the compatibility (and more particularly the real price delivery) of the yielded credits when they are notified separately by the Irish authorities. These individual examinations envisage a mechanism of recovery in the event of over-payment.

The above sentence is a translation of the piece below.

“La Commission examinera également chaque plan de restructuration pour s’assurer que la participation des établissements financiers à cette mesure soit suivie de mesures de restructuration à même de favoriser leur retour à une viabilité à long terme.”

There could be better translaters here on the pin.

[maryocarol]

The Commission will also examine each restructuring plan to make sure that the participation of the financial institutions in this measurement is followed capable restructuring measures to support their return to a long-term viability.

This is the above translation sorry, the provious one is mixed up.

“La Commission examinera également chaque plan de restructuration pour s’assurer que la participation des établissements financiers à cette mesure soit suivie de mesures de restructuration à même de favoriser leur retour à une viabilité à long terme.”

[maryocarol]

From the EU about the nama!
The decision of authorization adopted today relates only to the mode of the NAMA. The Commission will appreciate the compatibility (and more particularly the real price delivery) of the yielded credits when they are notified separately by the Irish authorities. These individual examinations envisage a mechanism of recovery in the event of over-payment. Lastly, the Commission counts on a certain number of commitments entered into by the Irish authorities to take care that the NAMA, while carrying out its objective of maximization of the value of the acquired credits, does not distort competition while using of some of the capacities, exceptions and special laws granted by the law creating agency. The Commission will also examine each restructuring plan to make sure that the participation of the financial institutions in this measurement is followed (following!) capable restructuring measures to support their return to a long-term viability.

[yoganmahew]

The whip hand has already put the club foot in its place…
finance.gov.ie/viewdoc.asp?DocID=6221

The Minister explained that arising from the consultation, the valuation methodology set out in the valuation regulations will be amended to take account of the Commission’s decision. Within the valuation methodology a higher remuneration risk margin and higher enforcement costs will be applied. There will however be a reduction in the interest rates used for loan discounting purposes.

As already pointed out (or was that on IrishEconomy?), the DoF have pushed the green slider down and the red slider up to keep the figures in their model the same… this is not really going to help them, though, because the red slider has a clawback mechanism…

“NAMA will also report to the Commission on an annual basis on the use of certain powers in the NAMA legislation. This reporting arrangement is a welcome addition which will reinforce transparency, bolster public and international confidence in the process and further confirm and provide assurance that the powers of NAMA will not be used in an anti-competitive manner.”
I expect that these reports will be published on the EU website or at the very least available under EU FoI legislation.

[goldmanberg]

Here’s a press release from Eugene Regan on what the EU conditions mean, if you’re interested :

Fine Gael’s Eugene Regan has today (Sunday) said the EU Commission’s approval of NAMA, which is qualified by a series of conditions relating to pricing, competition and restructuring, as set out by Fine Gael, will provide much needed safeguards for the Irish taxpayer. Senator Regan went on to say that the Commission must now ensure that these conditions are rigorously adhered to especially where Anglo Irish Bank and Irish Nationwide Building Society are concerned.

“The conditions attached to the EU Commission’s approval of NAMA clearly underline the inherent flaws in the scheme and are critical to ensuring damage limitation for the taxpayer.

“While Fine Gael would have wished that the scale and scope of NAMA were reduced by excluding Anglo Irish Bank and performing loans, we nevertheless welcome the fact that the Commission has taken into account many of the points raised by me in my submission to the European Commission of 15th December 2009 and 12th February 2010.

“By taking on board suggestions, with regard to pricing and the valuation process, the Commission has limited the ability of NAMA and the Government to deliberately force taxpayers to overpay the banks for their toxic developer loans and to distort competition in the property market to the benefit of NAMA.

“This in turn makes it almost certain that the transfer of loans to NAMA from Anglo Irish Bank and Irish Nationwide Building Society will leave both institutions insolvent. The Commission’s guidelines make it clear that in such a scenario, insolvent banks should ideally be broken up and / or wound down in an orderly manner, as Fine Gael has been arguing, with losses being absorbed first and foremost by private investors, including certain classes of bondholders.

“The Commission’s guidelines provide that ‘once assets have been properly evaluated and losses are correctly identified, and if this would lead to a situation of technical insolvency without State intervention, the bank should be put either into administration or be orderly wound up, according to Community and national law’.

“I am now calling on the Commission to ensure that its own guidelines are followed after the NAMA write-downs render Anglo and Irish Nationwide Building Society insolvent by forcing the Irish Government to either wind them down or break them up as per Fine Gael policy.”

His french is apparently excellent.

[yoganmahew]

I believe the Commission’s french is excellent too…
(It is no accident that it reads like this).

[Coles2]

Senator Regan has done the State some service, but not in the Haughey or Bertie sense thankfully.

[BoyRacer]

It took Europe to rein in Nama - David McWilliams → sbpost.ie/post/pages/p/whole … qqqx=1.asp

Last Friday, the commission - with Joaquin Almunia now holding the competition brief - told this reckless, incompetent government, which has been throwing around billions of our money as if it were confetti, to get a grip. The commission has said the valuations the government is putting on land for Nama are too generous to the banks.
Despite this, the spin put out from Merrion Street is that the commission was happy with Nama. This is not the case.
Closer reading of the press release suggests there is considerable unease in the European Commission about our latest ill-advised adventure. Of course, the mainstream media swallowed the government’s spin hook, line and sinker. No surprise there.
However, the press release, designed to obscure, not inform, is quite different. Hidden in the Department of Finance’s press release, there is a crucial line that states: ‘‘Within the valuation methodology, a higher remuneration risk margin and higher enforcement costs will be applied.”
As a result: ‘‘It is not the minister’s intention to perform another top-down aggregate estimate of the potential haircut that the institutions will face.”
This means, in plain English, that the commission believes the government is trying to shaft us, the taxpayers, with its optimistic valuations. It has told the government that there is no way the commission will allow it to stick to its original 30 per cent discount.
You might remember that, originally, the government said that it would apply a 30 per cent discount to the property loans Nama was supposed to buy off the banks.

there is more

[osvaldoc]

If the Commission make sure valuations for the loan transfers are realistic then the entire Irish banking system is doomed to be liquidated. This is indeed good new for the Irish Taxpayer.

[yoganmahew]

Excellent piece from Mr. McWilliams, IMO. Despite repeated assurances, there is an unwillingness to nationalise the banks (as in take majority ownership). I am unclear on why this should be as I think ideology to FF is as fur coat is to knickerless lady.

[jmc]

@BoyRacer

It took Europe to rein in Nama - David McWilliams → sbpost.ie/post/pages/p/whole … qqqx=1.asp

He is advised by people who, from the beginning, wanted a certain outcome, irrespective of the facts. The people who came up with Nama had the answer they wanted before they asked the questions. They wanted to keep the banks as private entities at all costs.

The banks are required to hold a certain minimum amount of capital. If a bank is trading recklessly without sufficient capital, someone has to inject capital. But without investors, the government has to nationalise. Of course, for ideological reasons

, Lenihan and his gang wanted to avoid nationalisation.

So close, David, but no banana…

Ideology has nothing to do with it.

They want to keep the banks private i.e under Irish control, so that the crony capitalists can continue with the merry go round. Once the banks are nationalized then EU laws kick in and the banks will be caught in an inexorable process that leads to the banks being sold to foreign owners.

Foreign owners = end of the incestuous cozy little world of the current ruling class.

Which would be a very good thing for everyone else.

[bungaloid]

NAMA is toast, an expensive irrelevance. The NAMA cul-de-sac has done maximal damage to the economy by delaying the inevitable bank nationalisations.

Of course the government will happily waste yet more billions on a face-saving exercise.

In the perennial stupidity versus corruption debate, this is clearly a case of stupidity.

[yoganmahew]

@bungaloid

NAMA is toast, an expensive irrelevance. The NAMA cul-de-sac has done maximal damage to the economy by delaying the inevitable bank nationalisations.

Of course the government will happily waste yet more billions on a face-saving exercise.

In the perennial stupidity versus corruption debate, this is clearly a case of stupidity.

I have it on good advice (well, Terry Prone’s sculpted voicebox on the radio this morning - whether it was her or her surgeon’s words is another thing) that the front benches are packed with smart people. It is therefore inconceivable that it could be stupidity. It must therefore be cupidity. Cupid to whom, though?

[bodyofevidence]

@yoganmahew

Excellent piece from Mr. McWilliams, IMO. Despite repeated assurances, there is an unwillingness to nationalise the banks (as in take majority ownership). I am unclear on why this should be as I think ideology to FF is as fur coat is to knickerless lady.

oh come now YM. If you believe what mr lenihan has to say here https://www.finance.gov.ie/documents/speeches2010/spl43irishtax.pdf then nationalisation is a fine and desirous thing…

[yoganmahew]

@bodyofevidence

@yoganmahew

Excellent piece from Mr. McWilliams, IMO. Despite repeated assurances, there is an unwillingness to nationalise the banks (as in take majority ownership). I am unclear on why this should be as I think ideology to FF is as fur coat is to knickerless lady.

oh come now YM. If you believe what mr lenihan has to say here finance.gov.ie/documents/spe … ishtax.pdf then nationalisation is a fine and desirous thing…

And that’s precisely what I mean - faced with an oncoming train, the standard FF response is to tell us they always wanted railroad tracks, ching-ching.

[goldmanberg]

@bodyofevidence

If you believe what mr lenihan has to say.

I believe he might believe he’s believable. Unbelievable.

[bodyofevidence]

@goldmanberg

@bodyofevidence

If you believe what mr lenihan has to say.

I believe he might believe he’s believable. Unbelievable.

i believe that…

[provost]

@BoyRacer

It took Europe to rein in Nama - David McWilliams → sbpost.ie/post/pages/p/whole … qqqx=1.asp

hmmm…

As a result: ‘‘It is not the minister’s intention to perform another top-down aggregate estimate of the potential haircut that the institutions will face.”

This means, in plain English, that the commission believes the government is trying to shaft us, the taxpayers, with its optimistic valuations. It has told the government that there is no way the commission will allow it to stick to its original 30 per cent discount.

You might remember that, originally, the government said that it would apply a 30 per cent discount to the property loans Nama was supposed to buy off the banks.

The commission has obviously told it to snap out of it. The commission maintains that the valuations will have to come down significantly from the minister’s original estimates.

I’m pretty sure I remember Brian Lenihan saying … maybe conceding… on RTE… I think it was RTE…

anyway I think I remember him conceding that it we discount more than 5billion below the original intended NAMA discount… that the taxpayer will be shafted and NAMA will fook us all over

anyone remember what I’m thinking of?

I also have it in my head that Ronan Lyons discussed something along those lines somewhere… maybe his blog?

it’s all very vague… did that actually happen? anyone remember?