Nobel Laureate queries NAMA

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irishtimes.com/newspaper/bre … aking8.htm

The 2003 winner of the Nobel Prize in economics, Robert Engle, has said he does not think the US plan to deal with toxic bank assets will work and therefore does not know whether the “bad bank” plan in Ireland will work.

Prof Engle, a professor of finance at New York University’s Stern School of Business, said: “I don’t think the US one is likely to work so I don’t know if Ireland’s one is going to work.”

Speaking to reporters about the National Asset Management Agency (Nama) at a conference on international finance at Trinity College Dublin, he said there was “a lot of concern” about how Ireland would deal with the banks’ toxic assets and “whether this system that has been proposed is really going to work”.

independent.ie/business/iris … 66378.html

He expressed limited knowledge on the Government’s plan to bail out the banks through NAMA, but said given the recent movements on our credit default swaps – the insurance products to cover Irish government bonds it was evident that the market had a lot of concern over whether the NAMA system was going to work.

And he added he did not feel the US bank rescue plan, involving a similar approach to NAMA, was going to be effective.