Comments on: IT Head to Head on NAMA Plan http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/ Sun, 12 Feb 2012 20:48:33 +0000 http://wordpress.org/?v=2.6.3 By: James Conran http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4809 James Conran Sat, 11 Apr 2009 18:48:59 +0000 http://www.irisheconomy.ie/?p=1621#comment-4809 @ James I think Karl's point would be (using your figures): option A): pay €50b for assets previously valued at €90b and recap the banks to tune of €40b - taxpayer owns the banks (hence the "upside") option B): pay €90b for same assets - banks end up just as recapitalised as in A), but the private shareholders own the banks and the upside @ James

I think Karl’s point would be (using your figures):

option A): pay €50b for assets previously valued at €90b and recap the banks to tune of €40b - taxpayer owns the banks (hence the “upside”)

option B): pay €90b for same assets - banks end up just as recapitalised as in A), but the private shareholders own the banks and the upside

]]> By: James http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4724 James Fri, 10 Apr 2009 23:27:40 +0000 http://www.irisheconomy.ie/?p=1621#comment-4724 @Karl Whelan You'll have to set it out for me. Either way I think we will own €50B of loans and about 70% to 80% of the Irish banks. The write down will be so large that we could extinguish all equity but for political reasons we will stop at the level. What else is in it for the taxpayer? @Karl Whelan
You’ll have to set it out for me.

Either way I think we will own €50B of loans and about 70% to 80% of the Irish banks. The write down will be so large that we could extinguish all equity but for political reasons we will stop at the level.

What else is in it for the taxpayer?

]]> By: Lefournier http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4717 Lefournier Fri, 10 Apr 2009 21:16:57 +0000 http://www.irisheconomy.ie/?p=1621#comment-4717 How much independence does Scott Rankin have in relation to his views on bank bailouts? Davys was 90% owned by Bank of Ireland until about 2 years ago when BoI facilitated a management buyout. Davys, Goodbody and NCB, the three largest stockbrokers who all have strong links to the banks, put forward a joint budget submission recently. Apart from the signal that such a coordinated move must send to the Competition Authority, the Irish Times should put a "health warning" on the such opinions: they are anything but impartial. How much independence does Scott Rankin have in relation to his views on bank bailouts?

Davys was 90% owned by Bank of Ireland until about 2 years ago when BoI facilitated a management buyout. Davys, Goodbody and NCB, the three largest stockbrokers who all have strong links to the banks, put forward a joint budget submission recently. Apart from the signal that such a coordinated move must send to the Competition Authority, the Irish Times should put a “health warning” on the such opinions: they are anything but impartial.

]]> By: Karl Whelan http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4690 Karl Whelan Fri, 10 Apr 2009 17:50:38 +0000 http://www.irisheconomy.ie/?p=1621#comment-4690 @James The short answer to your question is Yes. The long answer is --- As I said, look carefully. Do you really think taxpayers would be just as well off buying the assets for €90 billion? @James

The short answer to your question is Yes. The long answer is — As I said, look carefully. Do you really think taxpayers would be just as well off buying the assets for €90 billion?

]]> By: bill hobbs http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4687 bill hobbs Fri, 10 Apr 2009 16:40:58 +0000 http://www.irisheconomy.ie/?p=1621#comment-4687 Has anyone considered NAMA's operating costs and structure. Securum (Sweden) had only 400 customers and 3000 loans to contend with from one bank. NAMA it appears will have thousands of customers and loans coming from at least six banking systems and their differing lending processes etc. The NTMA may have expertise and standing in its narrow files of sovereign treasury mangagement but what of expertise in operating what will become one half of a very large banking portfolio of active loans. Has anyone considered NAMA’s operating costs and structure. Securum (Sweden) had only 400 customers and 3000 loans to contend with from one bank. NAMA it appears will have thousands of customers and loans coming from at least six banking systems and their differing lending processes etc. The NTMA may have expertise and standing in its narrow files of sovereign treasury mangagement but what of expertise in operating what will become one half of a very large banking portfolio of active loans.

]]> By: Pat Donnelly http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4683 Pat Donnelly Fri, 10 Apr 2009 15:53:01 +0000 http://www.irisheconomy.ie/?p=1621#comment-4683 If we have the money. And for reasons connected to previous posts of mine, we should examine each "asset" and the bank records relating to it and the bank personnel who dealt with the "asset". We will know what we are talking about only after months of examining the "assets". If we do it properly. Remeber the DIRT enquiry? Something similar to that. There is no guarantee of that. Will it be done overnight? Then we will know that there are people who are so brazen that they believe that they can steal money from the taxpayer to benefit their cronies. If we have the money.
And for reasons connected to previous posts of mine, we should examine each “asset” and the bank records relating to it and the bank personnel who dealt with the “asset”.
We will know what we are talking about only after months of examining the “assets”. If we do it properly. Remeber the DIRT enquiry? Something similar to that. There is no guarantee of that.
Will it be done overnight? Then we will know that there are people who are so brazen that they believe that they can steal money from the taxpayer to benefit their cronies.

]]> By: James http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4681 James Fri, 10 Apr 2009 15:27:41 +0000 http://www.irisheconomy.ie/?p=1621#comment-4681 If we buy €90B of loans from the banks for €50B won't we just have to recap the banks with another €40B? If we buy €90B of loans from the banks for €50B won’t we just have to recap the banks with another €40B?

]]> By: Patrick Honohan http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4666 Patrick Honohan Fri, 10 Apr 2009 13:07:45 +0000 http://www.irisheconomy.ie/?p=1621#comment-4666 Fair enough. Fair enough.

]]> By: Philip Lane http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4663 Philip Lane Fri, 10 Apr 2009 12:46:26 +0000 http://www.irisheconomy.ie/?p=1621#comment-4663 Regarding Patrick's suggestion, the phrase 'underpayment' is maybe misleading. Rather, the proposed payment consists of two parts: a upfront payment which includes a risk discount, plus the equity-type stake in NAMA's portfolio. Taken together, this deal is the 'appropriate' payment for the transfer of the loans. Regarding Patrick’s suggestion, the phrase ‘underpayment’ is maybe misleading. Rather, the proposed payment consists of two parts: a upfront payment which includes a risk discount, plus the equity-type stake in NAMA’s portfolio. Taken together, this deal is the ‘appropriate’ payment for the transfer of the loans.

]]> By: Patrick Honohan http://www.irisheconomy.ie/index.php/2009/04/10/it-head-to-head-on-nama-plan/#comment-4657 Patrick Honohan Fri, 10 Apr 2009 11:36:13 +0000 http://www.irisheconomy.ie/?p=1621#comment-4657 Karl, As you say, overpaying for the assets will clearly entail a net cost for the taxpayer. To deal with this problem I <a href="http://blogs.ft.com/economistsforum/2008/09/the-price-of-salvation/#comments" rel="nofollow">suggested</a> back in September. in the context Paulson's original plan, giving the purchasing agency an equity warrant to compensate for any overpaying. (This idea was later independently proposed by <a href="http://blogs.ft.com/economistsforum/2009/02/a-strategy-of-contingent-nationalisation/" rel="nofollow">Jeff Sachs</a>). Now, however, there is so little value in Irish bank shares that such an approach has become infeasible. That is why I am now advocating underpayment for the assets to be compensated by giving risk capital providers some form of equity stake in NAMA's portfolio. Karl, As you say, overpaying for the assets will clearly entail a net cost for the taxpayer. To deal with this problem I suggested back in September. in the context Paulson’s original plan, giving the purchasing agency an equity warrant to compensate for any overpaying. (This idea was later independently proposed by Jeff Sachs).

Now, however, there is so little value in Irish bank shares that such an approach has become infeasible. That is why I am now advocating underpayment for the assets to be compensated by giving risk capital providers some form of equity stake in NAMA’s portfolio.

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