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No, Finland did not say NAMA was a good idea

Read more about: Economy, NAMA     Print This Post

Bloomberg News story on Ireland’s lessons for Spain –

Finnish Prime Minister Jyrki Katainen said on June 11 that Spain should split up some lenders, with some loans dispatched to a bad bank, as Ireland did.

Actual quote from Finnish PM via Bloomberg News 3 days earlier –

“The unhealthy banks should be brought down or some banks should be possible to chop up” so that the healthy parts continue and the rest ends in a so-called bad bank, Finnish Prime MinisterJyrki Katainen said in an interview in Norway today. “There must be a possibility to restructure the banking sector because it doesn’t make sense to recapitalize banks which are not capable of running.”

Ireland spent 2 years, in tandem with NAMA’s existence — insisting that it couldn’t shut down or chop up its banks, and instead that the only option was to keep putting money into them. Indeed, Patrick Honohan recently acknowledged, although it didn’t get enough attention, that the infamous guarantee was itself an obstacle to restructuring the banks.

There are lessons for Spain from Ireland, but they amount to doing the opposite of what Ireland did, not some variation on it.  It also indicates a need to be wary of Prime Ministers with an unseemly focus on attending soccer matches.

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3 Responses to “No, Finland did not say NAMA was a good idea”

  1. # Comment by EddieL Jun 15th, 2012 18:06

    “There are lessons for Spain from Ireland, but they amount to doing the opposite of what Ireland did, not some variation on it.”
    So we got everything wrong. Obviously! And I still see people coming up with facts, figure and percentages as if they had solution to the problem.
    Now that the €uro horse has well and truly bolted I think it is time we went for a native breed which should be less giddy.

  2. # Comment by Veronica Jun 16th, 2012 00:06

    The problem is that nobody knows what to do. Back in the early 1930s, the problem was a Viennese bank…once it collapsed the collateral damage brought down the rest of the European economy. Just as Greece does now, it represented about 3% of the overall European economy. And then, everything came thundering down….

  3. # Comment by Chaussure de Foot Jun 22nd, 2012 07:06

    Bonjour, je suis nouveau ici, thank u pour votre partage

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