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Why do we have NAMA and Anglo Irish Bank as separate institutions?
Read more about: NAMA 
The latest NAMA loan transfer data – completion of “Tranche 2″ with Anglo loans — is out. The discount on the Anglo loans is 62 percent. Bloomberg News had a good quality leak over the weekend. Since the discount includes the “long-term economic value” that NAMA adds to each loan, the implied value of the underlying loans is even lower. These loans are worth about a quarter of their face value.
Also illuminating is NAMA’s consolidated data for all the loans taken so far. Anglo accounts for nearly half of the total and a huge majority of the number of loans: 1100 loans out of 1800 in Tranche 1 and 1200 out of 1800 in Tranche 2. In other words, all this effort to extract and value thousands of Anglo loans, as opposed to sending new people into Anglo to do it. And the Anglo restructuring plan already envisages that part of it will be left as a bad bank so Anglo is going to need those skills anyway. So Anglo will spawn 2 bad banks — its own, and NAMA. As the price tag for Anglo goes up and up, the policy makes less and less sense.
“Why do we have NAMA and Anglo Irish Bank as separate institutions?”
“As the price tag for Anglo goes up and up, the policy makes less and less sense.”
If public reaction to news reports are anything to go by, public fatigue has set in and now no one cares. So the idea of drip-feeding the bad news while at the same time creating confusion along with an almost complete lack of essential information of what has happened and how it happened has worked. Someone is obviously playing a blinder!
How would it make any difference if NAMA and Anglo-Irish were one institution? unless you think we would save on administration expenses or something? Both instutions are belong to the state so the public pays the bill anyway …
I think the problems here are far more fundamental than any particular instutions, they are systemic – to use a phrase popularised in this crisis!
The problems are systemic in that our economy is not focused in any way towards solving the requirements of Irish people, everything our state does is in response to the needs of foreign capital, and generally, large foreign corporations.
Where is our plan for development of domestic enterprise? Development of our own substantial natural resources?
Irish people need to get organised to take this problem up for resolution ourselves, neither FF, FG, Labour or Green, or most conservitive economists are really interested in the lives of ordinary people – it’s a case of ‘he who pays the piper calls the tune’.
Diarmaid: I agree with you. “The problems are systemic in that our economy is not focused in any way towards solving the requirements of Irish people, everything our state does is in response to the needs of foreign capital, and generally, large foreign corporations.”
There are many paralells in history where nations were and are destined to be never anything more than colonies of empires. We obviously swapped the British empire for the American/EU empire. So don’t be surprised when we now shut up and do what we are told.
Selling out is a speciality of Irish politicians.
Why should we object if they decide to do so privately? Allowing money to be pumped into a bubble means commissions can be paid, provided the money is recovered with interest paid!
Ay there’s the rub! If this money were to be lost, if the taxpayers refuse to cover these wasted monies, then the payments, finders fees, etc will never be fully honoured, via the money laundering system called international banking.
Just as well that the IFSC is so well run! Just imagine what liabilities would exist if the customary Irish style has been used there! Better not to imagine it really, it might mean Garda Commissioner FACHTNA Murphy would have to investigate!!!
The benificeries of the gravey train during the Centic Tiger should all be subjected to CAB type investigations, if fact, there should be new emergency laws to re-possess their assets which I believe are the fruits of crime.
The basic problem, however, is deeper than matters economic, they go to the heart of our democracy … I would like to refer you to this link which I believe describes the necessity of our time – Irish people must lay claim to our own democracy.
http://www.thefuture.ie/news/democracy_Ireland
Why Anglo says it can’t be liquidated immediately
A liquidation of all of the Bank over a 12 month period – The first option considered was a 100% liquidation of the Bank over a 12 month period. To execute this option the Government would have to sell the Bank’s post NAMA customer loan book at a significant discount. This course of action was clearly the least optimal for the taxpayer as it would crystallise significant capital losses from fire-sale disposals in an already depressed property market, triggering highly negative systemic effects. In addition, there would be an immediate exit of foreign deposit funds, creating further liquidity stress on the Irish State. It is not difficult to see why the Government, the Financial Regulator and the Bank’s Directors consider that an immediate liquidation of the Bank is prohibitively expensive.
2010 Interim Report, p8.
So they are dumping loans into NAMA which crystallizes losses immediately, hence all the capital they need from the minister, but they can’t be liquidated because they’d have to do the same thing to all the other stuff. So they are doing enough NAMA to need billions in support, but not enough NAMA to be actually put out of its misery.
In other words, no NAMA and there might be a case for not liquidating Anglo for the reasons they state. But NAMA + Anglo = incoherence.