Time has come for Nama's critics to put up or shut up


Article by Frank Daly, NAMA Chairman in today’s Times

Time has come for Nama’s critics to put up or shut up

irishtimes.com/opinion/time- … -1.2378519


I wonder if Michael Somers read that with a smirk on his face.


Frank Daly seems to be dancing around a very interesting issue.

BUT, the sale to Cerberus wasn’t £1.3 Billion. Part of the portfolio was removed and sold separately for £60 million. This left the remainder of the portfolio with a reserve of £1.24 Billion, and how much did it sell for? €1.241 Billion, less than 1 tenth of 1% above the reserve. It would be the same as bidding for a house with a reserve of 124k and exceeding it by €100.

-Question 19.


Don’t see the issue to be honest … if the winning bid was £1.3bn and it was subsequently adjusted on closing to £1.241bn because £60m had been taken out of the portfolio, where’s the problem? That happens all the time on distressed asset disposals. The time delay between bidding and closing is significant. He says they “achieved £1.3bn for the taxpayer”, not that it came from a single source.


Put up what?

Much as I dislike the banks, letting them manage their own distressed assets while nationalising/recapitalising still seems a cheaper solution than setting up an external entity to do it. The banks were not fundamentally restructured (or at all?), consolidated, remanaged even, barring the basket cases. Credit did not flow as a result of clearing out the distressed assets and recapitalising the banks because the solution chosen was to reflate the housing market. In that instance, choking credit and maintaining a phoney stand-off and at the same time restricting supply was the appropriate solution. If you want to stick a nail in it, you need to invent a hammer.

I don’t particularly blame FG/Lab for this, they were stuck with it. Governments, as we see with Syriza, have a difficult time with inherited problems. Beside which, I’ve plenty of fuck-ups that they made all on their lonesome to blame them for.

Once you build a NAMA, once you pin your strategy (and the solvency of the state) on long term economic value, you have to see it through. What will be interesting is what happens when NAMA ends. Beware of those looking for NAMA to be some sort of government land agency; like an uber developer, it’s only rationale will be high land and property prices…