see the post by Ciaran Cuffe: you can read it here.
A Green View of NAMA
- Post author By Philip Lane
- Post date April 24, 2009
- Categories In Banking Crisis
- Tags NAMA
- 3 Comments on A Green View of NAMA
Month: April 2009
Some ‘on the street’ evidence of the state of the job market:
On last night’s Prime Time report on quangos and inefficiencies in the public sector, reporter Donagh Diamond said:
The introduction of the euro abolished a major function of our central bank, the devising of monetary policy. So we wondered where all the staff went. Remarkably, the CB tells us that on the creation of the euro “The functions of the CB remained largely the same” clearly indicating that no staff went anywhere.
As a former employee of the Central Bank, I have regularly had this point put to me over the past number of years—“What does the Central Bank do now?” But this question, and Donagh Diamond’s comments, are based on a highly flawed understanding of how the ECB’s monetary policy operates.
Unemployment in Spain is now 17.4%.
There may not be any legislation yet but NAMA has a website. It provides an example of how NAMA will buy loans from the banks using a “purely illustrative” example of a 25% discount. It has been widely reported that AIB would be selling €30 billion in loans to NAMA. A writedown of €7.5 billion would wipe out essentially all core Tier 1 (shareholder) capital, so this is an interesting illustrative example.
Update: Patrick correctly points out that the illustration is of a €25 million writedown of a €65 million loan for a property originally worth €100 million. So indeed it’s a 38.5% discount. I know it’s just an example but it’s interesting all the same.