Puzzles to solve before Nama is up and running
SIMON CARSWELL, Monday, June 29, 2009
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BUSINESS OPINION: IT IS approaching three months since the Government announced plans to cleanse the banks by buying up to €90 billion in the toxic loans. However, it is fast emerging that it could be some time before we know the knock-down price at which the State’s “bad bank” Nama will buy the assets.
The Government has said that “an economic value” will be applied, in line with EU guidelines. This will allow the State to set an approximate value so it creates some flexibility. Minister for Finance Brian Lenihan must leave the taxpayer with some prospect of making a profit from the loans and at the same time not blow an even bigger hole in the banks’ capital forcing another Government hand-out. It will be an exceptionally difficult balance to strike. Either way, the State will be picking up the tab up-front.
