Further Delays on NAMA

When the NAMA bill was being debated in the Dail last Autumn, the public was regularly told that the plan was to have the first tranche of loans transferred by the end of last year. Today’s Sunday Business Post reports that further delays are now expected due to delays in preparations at the banks and due to the absence of clearance from the European Commission. The story reports that a verdict from the Commission may not come until the end of February at the earliest.

Stories such as this and this from the today’s Sunday Tribune also make it clear that it is going to be very difficult to attract private funds to the banks. At this point, it is perhaps a legitimate question to ask whether events have not overtaken the whole NAMA-Long-Term-Economic-Value strategy to keep the banks out of some form of temporary nationalisation.

28 replies on “Further Delays on NAMA”

I expect the European Commission will stall until the European Monetary Fund is firmed up. Hopefully the ECB will play ball in the interim. In any case we will likely be spared the indignity of going cap in hand to the IMF.

@Karl Whelan
Interesting observation from AIB’s former head:

“Sheehy (55) claimed that the crisis for Irish banks started as early as May 2007, much earlier than many commentators realised.

“There were dark clouds even then. It was like catching falling knives every day,” he said, as cheap funding for the banks started to evaporate.”


More and more evidence is accumulating that we were deliberately mislead at the last election – and ever since – by the government.

The country has plenty of cash – for the country. The country can pay it’s debts, private companies will have to make arrangements with their creditors. However, there is now no option but to repeal the blanket guarantee for bank bondholders pre-Sept 2008. Then the banks and the IMF and the bank bondholders can work everything out between themselves. In the interim we will have to seize the banks to ensure everything is kept running pending their agreement and give them all, say, three months to sort themselves out.

We have already given the banks’ bondholders €11 Billion. It’s time to call a halt. If the government resign and win an election on giving even more billions to bank bondholders so be it. Seeing as they mislead us at the last election it would at least make an honest government of them.

@ Karl

quelle surprise.

Or as they say in the Central Bank of Ireland “Welcome to your bankruptcy”.

So why is it Karl that Anglo Irish Bank with (what?) €100,000,000,000 of liabilities has been guaranteed by the Citizens.

Fianna Fail aren’t big enough to do it Karl. You know that.

It was the ECB from the get go.

What do you think Karl? How about this?

The ECB knew that if Anglo Irish Bank was allowed the decision of the market that decision would have destroyed the Euro.

Does that make sense Karl? I think it does.

I can think of no other reason for the ECB to provide €100bn to a corrupt politic.

Mind you, I’m sure the ECB doesn’t give a damn whether it’s €100Bn or €100Tn.

These days Karl, it’s just a question of which money printing machine works faster than the other.

Why is it Karl that the printing of money (creation of credit) is absent from “Macro Economics”.

Why does Macro Economics fear Money Creation?

Tell ya what Karl. I’ll create 2,000,000,000 smart green jobs in Ireland if you let me Print (Counterfeit) €200,000,000,000 of the thing you think is money.

I’ll take 10% of that for being a genius and I’ll give you a Doctorate in Macro Economics for recognising my genius.

Deal or no deal.

It’s all just paper.

An excellent point! As time drags on then more delay will enter the field. We are bankrupt in too many ways to list but the lack of effective policy is the one that counts.
D McW is piling on the consequences too!


The government and the voters do not understand that capital is always scarce else it is fake. And Ponzi capital is the most expensive of all. All of the borrowings we need has to be sourced. The ECB cannot make money. It merely accounts for it.

Hmmm! Well said, as usual!

I have been hoping for delay, as we experience the waves of capital destruction that drive up the real rate of interest on ever scarcer borrowings. EVER SCARCER BORROWING.
No cheap credit. No credit at all. Which is GOOD news!

It has gone but the exec still believe it can command it into existence showing genuine ignorance of the nature of capital. The more that a government interferes in an economy, the more it destroys capital, albeit while enriching cronies. The burden then falls on the voters until they wise up. Feeling wiser yet? Any wiser? Anybody?

How do we create capital people? Any body? Even academics?

Say, what has happened to the savings rate??????? Are people buying less? Spending less? Now that we all have more time and less money? Who is going to suffer most? Those in FIRE and then services, right? While those who actually produce something will reap rich rewards as costs fall. Wow. Awesome.

The market is asserting itself. Governments cannot alter this but they can pay economists with Ph.Ds, to say that they can. They can fool all of the people some of the time, but there are always those they can fool all of the time, WHICH are you gentle reader?

The articles reflect reality fairly well, but again confuse revelation with origination.
The corrupt way of conducting business in Ireland will change. It will be driven out as capital flees elsewhere. When it chnages then capital will be attracted back.

When are we going to change? Your choice folks. You decide. Those fifty and over may as well retire now! The younger ones who were victims of corrupt practices of their elders who had learned what is effective, will eventually change the way of doing business, after a decade or two.

You blew it! It is very behavioural?

Anyone here feel an ounce of sympathy for the, apparently, highly-qualified and experienced German expert, Klaus Regling, who has agreed to conduct a preliminary investigation of this nest of vipers?

A consultant from a Brussels consultancy who took the job on condition he is provided with an assistant who knows the “Irish” ropes. Reminds me of the old saying “A consultant is someone 100 miles from home with a briefcase who borrows your watch to tell you the time.”. The real inquiry will take place after the next election, until then it will be business as usual. I realize I am being super optimistic and that we will actually not vote for the same old chancers. Hope springs eternal in the human breast and hope is all we are left with now.

The LTEV also has merit in helping ease the plan past shareholders which has now been done. There is a maximum uplift for LTEV in the legislation but no minimum uplift afaik. Therefore NAMA should be bale to tweak the “masterfully vague” methodology down in line with EU Commission recommendations. Banks could not complain because LTEV is an EU Commission concept in the first place.

Even if the EU does not demand a lower LTEV, the Valuation process may err on the stingy side if it looks like there is no material benefit to substantial overpayment because the banks will end up in large majority state ownership anyway.

The flexibility of the loan by loan valuation process and the fact that it does not allow the bank to overstate the value of their loans is coming into its own now. Of course NAMA, loan-by-loan valuation and LTEV does not prevent nationalisation if same becomes necessary. The AMC and nationalisation are two sides of the one coin as the IMF said.

@ Zhou

Glad to hear everything is going so well. For a second there I thought we had a bunch of zombie banks tightening credit and sleepwalking towards nationalisation. Good to know all is going according to plan.


There is a lot of work to be done in sorting out the bank loans whether the banks are nationalised or not. That work is going on apace. I think the Government have done well so far even if I have some criticisms of NAMA and of the DoF/DETE’s support for the unemployed, and the lack of a bank resolution scheme and bankruptcy reform.

The DoF’s approach to NAMA/Nationalisation has so far been vindicated imho. As you say, the problems have not gone away but we are still standing. Hopefully they will be able to expedite the transformation of Anglo into a good bank to alleviate the disproportionate pain that afflicts small and medium enterprises in a banking crisis. However, there is no tap we can turn to get credit flowing a la Kieran O’Donnell et al.

@Brian Lucey

The purpose of NAMA is to rehabilitate our banking sector so it can support our economy.

@ Zhou

“The purpose of NAMA is to rehabilitate our banking sector so it can support our economy.”

And how’s that coming along so far? 😆

I’m off to teach so no time to get into this now. Let’s just say that I reckon Zhou is setting a pretty low bar in relation to declaring the government’s banking policies a success.

you were coming along nicely. NAMA is designed to do this VIA supporting house prices. Some may call this Knut like, except that would be unfair as Knut did his act with the waves to show how powerless he was over the forces of nature.
A year on we are no closer to realization of the banking crisis. The gvt have admitted that NAMA cant realistically pumprime the lending to SME’s as they will put in some sort of loan insurance (why this and why not export credit insurance?). The banks are still toxic and seem to be destined to be willy-nilly nationalised by stealth, inches and reluctantly, thus ending up on the states plate for an indefinite period; the reputational damage to the state and the banking system remains unrepaired; etc etc.

I think the best policy is to stick to the point raised in the post at the top of the page.

The issue raised was whether LTEV should be jettisoned at this stage because of the changed view of the health of the banks, and because of the lack of private investors to invest in rehabilitated banks.

My point was that LTEV is sufficiently flexible to allow the Govt/NAMA to resile somewhat from significant ovepayment (although I did previously propose that the Govt should be allow to make ‘take it or leave it’ low-ball offers in respect of individual loans notwithstanding the valuation arrived at).

LTEV is not, and never has been, inconsistent with Nationalisation.

Proceeding with LTEV as currently formulate has the benefit of not having to change the legislative framework, allowing continuity in the due dilligence work, not requiring further shareholder approval, not giving the appearance of changing mid-stream and it also keeps the banks and their staff motivated to get this done. One of the benefits of not having 100% nationalisation is that the banks are anxious not only to get all loans transferred a.s.a.p. but also to have all security properly in place as the banks will be liable to NAMA for any error in that regard.

If we are going to talk about abandoning LTEV we must look at the reasons and the consequences dispassionately.

The idea that NAMA could stop the banks from tightening lending criteria while the economy was deleveraging (simply put have less loans outstanding) was never realistic.

I still can’t help but think that NAMA is so bad so it can’t be what is intended in the end……

Only thing I could think of so far is that by offering to buy the loans the government actually got to see the loans and therefore losses are getting recognised. 30% losses recognised so far, even before reviewing the loans, 40% after the first reviews and maybe, just maybe, the recognised losses already before any transaction taken place will be so large that nationalisation is inevitable and the price finally paid is irrelevant.

& maybe, by reviewing the loanfiles there might be some disciplinary actions taken. Failing to follow procedure which lead to millions in losses could at least in theory be called gross misconduct. If there is gross misconduct then summary dismissals are (at least should be?) possible outcomes. If bonuses were paid in conjunction to such things then there might be those who would consider those actions fraudulent and therefore subject to investigation by the Gardai.

Leniency for showing remorse might be possible, to show remorse an admittance of guilt is necessary. But then again, maybe everything was done correctly and by the book or maybe nobody is willing to be the first to try to get leniency so there will be no admissions of guilt nor any whistleblowers.

Btw, failing to document following procedure is in many companies considered the same as not following procedure. Anyone know if it is the same for the banks in question?

“The DoF’s approach to NAMA/Nationalisation has so far been vindicated imho.”

Thought Nama was the ultimate solution. Now, it appears that Nama is merely a stopping point on the way to nationalisation. The only thing that is vindicated is that they haven’t a clue what they are doing and are making it up as they go.

@Brian Flanagan

If you thought NAMA was the ultimate solution then you weren’t paying attention.

Also, I only said that their approach so far has been vindicated. I did not say that they had succeeded in fixing the banking crisis. There is a long way to go and this sucker could still go down.

@ Greg

“It was the ECB from the get go. … The ECB knew that if Anglo Irish Bank was allowed the decision of the market that decision would have destroyed the Euro.”

You are close to something vital here [but get real – it would not have destroyed the Euro – however the domino effect at the time from Lehmann was pervasive, in behavioral terms of course] … & FF and Minister Brian may have ‘bought an ECB pup’ – I recollect a comment from the Minister along the lines of ‘no European bank has folded’ (later erroneous of course)after some discussions with ECB around that time ……… from ECB perspective – protection of Euro far more strategic importance than Irish ineptitude or a couple of million collateral-damaged Irish citizens ………

Beware those anarchic tendencies Greg – Naa-Maa discussions does it to people – it creeps up – support group meetings on the dirt tracks around Merrion Square every six hours on the hour ……… bring your own bucket of cinders!

Seriously – you are onto something here ……….

@ Zhou,

“If we are going to talk about abandoning LTEV we must look at the reasons and the consequences dispassionately.”

I enjoyed reading your points above about abandoning LTEV. Good analysis of the situation. I always try and encourage the guys here to encourage the dots, when and if I can. But you have provided a good working example above, of how to see the wood and the trees together.

I had some time earlier today to sit down and read Garret Fitzgerald’s column piece about the inquiry. It is a wonderful example of Garret’s ability to step right back from all of the current excitement and hype, and again see both the wood and the trees.


Zhou_Enlai appears to be able to look at NAMA and its development as a policy over the course of its lifetime. Which is a skill in itself. Many, including myself have such a short memory of events. Although, I presume that Karl Whelan’s use of tagging and blogging will proof to be very useful down the road in establishing a timeline.

Garret’s Fitzgerald’s use of the timeline method to structure his column piece linked above was exceptional I thought. Also, his effortless way of combining political and economic developments over a long period of time, in his own memory. Who needs tagging and blogging when you can do what he can do I guess?

Frank McDonald, the Irish Times newspaper journalist has a similar kind of happy knack, of knowing both politics and environmental/planning matters – which enables McDonald to write books or articles, which are structured according to a very accurate time line, looking at the parallel streams of politics and environmental policy.

It is a wonderful skill for any columnist to be able to use. It makes what could be a very average article into a great article.

David Farrell, the political scientist at UCD published a piece in today’s Irish Times, which I highly recommend people read. Although, I am becoming a bit impatient at this point in time, with the notion of Dail deputies getting side tracked by their own constituency work. To quote from Farrell’s article:

“strengthening of local government (to reduce clientelistic demands on TDs)”

It is a fair point, and I do take his point. But, listening to the Dail coverage on RTE’s website the other evening, I heard Ms. Coughlan, Tanaiste, mention that the Irish state is the single largest employer we have. That was something new to me, thinking of the state in terms of it, as an actual employer.

I feel certain, that as Dail deputies struggle to fulfill duties as state employers, and work with their own constituents, there mustn’t be much time left over in the week/month or year, for much else.

So how can we logically expect so many miracles of government?

That is one point, I would like to fit in. Other than that, David Farrell’s article is excellent. I would say I have to agree with the man in his reckoning, major Dail re-structuring will not get us there. As bad an all as the Dail may be, without even going down that road, the fact is, most of the property tycoons and shycoons, never went near a Dail deputy.

There wasns’t enough time in the week/month/year/life to do so. They were too busy in dealings with multiple local authorities. Heck, an average large developer in the Celtic Tiger might have over 10 no. local authorities to deal with, on-going, from start to finish of major jobs. Where is he/she going to get time to smoose with Dail deputies?

Yeah, Sean Dunne knew Dail deputies, but he’s only a drop-kick anyway. The vast majority of hard working Irish developers, simply didn’t have the time to involve the Oireachtas on anything.

(Refer to Garret Fitzgerald’s piece linked above on the McCreevy period, very interesting)

That is why we seriously need to look at our local government and associated planning departments (too many of both for a small country). David Farrell is right, fix-ing the Dail up, on its own, isn’t going to do it.


“Frank McDonald, the Irish Times newspaper journalist has a similar kind of happy knack, of knowing both politics and environmental/planning matters – which enables McDonald to write books or articles, which are structured according to a very accurate time line, looking at the parallel streams of politics and environmental policy.”

This is what is so useful about McDonald’s work to me. I understand the environmental side perhaps better than he does. But then again, I would not have the first clue about why, or where, to start thinking about Irish or much global politics.

I don’t know what the precise marketing term for this would be – but it is like buying an ice cream with two different flavours, as opposed to one.


Thanks for the link to the GF article. His point is certainly valid and there is little coherent political analysis of why our system of democracy and governance was a critical factor in destroying competitiveness. It is notable that computer professionals did not experience the same wage inflation after the dot com bust and this may be why that sector remained competitive. Also, computer professionals were not lured to building sites and other well paid low skilled jobs like manufacturing workers were.

Is the recession now so bad that there is now a realisation that NAMA cannot be afforded? (apart from those who suspected this before now).

Eamonn Walsh, PwC professor of accounting at UCD’s Michael Smurfit Graduate Business School published an article in the Sunday Business Post last Sunday. I sat down at breaktime today and went though his what he had to say in the article. It is well worth reading. I will link the ‘printer friendly’ version here:


What you will notice in Mr. Walsh’s piece of analysis is, a careful discussion about the sequence of events surrounding the Irish banking crisis and how one thing lead to another thing.

What I wanted to mention in passing to Zhou_Enlai in response is this. I like to use the medical analogy to try and understand events relating to the Irish banking crisis. It just find it a useful way in which to develop a narrative.

What Karl Whelan’s original post above suggests, is that the patient has now being lying on his or her hospital bed for a while. We have being actively treating the patient with something. Perhaps we have realised our diagnosis wasn’t very good. I.e. It was like of an infection and more of a cancer problem.

But the point Zhou_Enlai raised is fairly simple. We as ‘doctors’ (government, and by extension the Irish people who elected government) have now become involved. We have administered a medicine to this patient, we have started a course of treatment. Our actions now, must be conditioned by an awareness of that fact, and work so as not to conflict with earlier actions taken.

That is, we do not wish to set the patient off into a series of complications if we decided to change our approach to treatment.


This government can’t even implement a bad idea properly.

Surely it’s time to hold an election and have a serious debate about what we’re going to do. Iceland did that and if I had to bet on one country or the other recovering in 10 years, I’d be betting on Iceland right now.

Take it to the people, have each party clearly articulate which way they want to go and let folks render a verdict.

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