The NAMA Bill is available here.
NAMA Bill
- Post author By Philip Lane
- Post date September 10, 2009
- Categories In Banking Crisis
- Tags NAMA
- 29 Comments on NAMA Bill
Month: September 2009
In a welcome shift, the government has indicated that NAMA may pay for bank loans by issuing two claims to the participating banks: standard government bonds in the amount of the minimum fair value of the loan assets, and a continent claim against any realized underpayment (I explain these terms below). It looks like the contingent claim might be classified as subordinated debt against NAMA as a separate government-owned entity. What are the policy objectives guiding this security design problem, and what would be the best feasible security design? What about the other huge contingent claim held by the banks (the bank liability guarantee)? Bringing the liability guarantee into the picture, and examining optimal design in the current circumstances, argues strongly for short-term nationalization as the best policy. However, if nationalization is ruled out for political reasons, then we can search for a second-best optimum excluding nationalization. I hope to write a technical note on this interesting problem over coming weeks, but in this blog entry I just want to make a few general remarks.
There is much of interest in the background papers prepared by departments and agencies for the Special Group on Public Service Numbers and Expenditure Programmes, released under FOI legislation here. Those with time on their hands may want to assess Group recommendations against the views of the relevant department on what cuts could be made and the potential costs of such cuts. Lawyers may be interested in examining the redactions and justifications under the FIO Acts 1997 and 2003.
OECD has analysed the likely impact of the current crisis on long-term economic growth and the innovation-related actions in policy responses of its member countries.
You can find the report here
Ireland is not covered in the report. It appears that Ireland has not responded to the questionnaire circulated by the OECD by the cut-off date for this report (early May 2009)
The FT website now carries a new group blog on economics: the link is here.