Eugene Regan’s NAMA Submission to EU

As many of you may have heard, Fine Gael’s Senator Eugene Regan (who’s been having a busy few weeks) submitted a formal complaint about NAMA to the European Commission in January. Last week, Regan followed this up by submitting a detailed discussion of how the NAMA legislation is inconsistent with the EU’s guidelines on impaired asset schemes. The detailed document is here and the summary is here.

40 thoughts on “Eugene Regan’s NAMA Submission to EU”

  1. @Karl Whelan
    I posted this already but it belongs here.

    “Names of top 10 borrowers in first wave of Nama transfers revealed”
    http://www.irishtimes.com/newspaper/frontpage/2010/0218/1224264715434.html
    This is another list.
    http://www.irishtimes.com/newspaper/finance/2009/1009/1224256256882.html
    3 names on both. Gerry Gannon, Gannon Homes and Co-owner of K Club, Joe O’Reilly, Dundrum Shopping Centre, Paddy McKillen, Jervis Shopping Centre.

    @ALL
    Well done to Eugene O’Regan, the first Oireachtas representative of the new Ireland. Everyone else was very good too (just in case they start treating him like George Lee).

  2. @ All.

    Is it not in our (the states) interest to transfer and sell all NAMA bound English loans ASAP (especially London)? I mean now that values have bounced 20/25% and especially considering that there appears to be some evidence to suggest a 2nd property slump is on the way over there.

    Wouldn’t it be nearly poetic if increases in asset values in England saved us from ourselves.

  3. Just a Punter

    You assume a market. They are all rigged to a greater or lesser degree! It has merit, though. But capital is so short…..

    I prefer that NAMA not gain any further traction at all. Let all values become true without interference and then people of all faiths, and “racial” origins can start again. With a free market.

    It is good that Mr Regan knows where the true sovereign can be found. Maybe NAMA will fade away. Let unrestricted fraction reserve banking follow!

  4. @moderator
    Could I humbly suggest that you apply the Jasper Carrot test to comments (‘Why does the nutter on the bus always end up sitting next to me?’)?

  5. From ER’s page:
    “Fine Gael has sought:
    • The exclusion from the NAMA scheme of all performing loans of the banks;
    • The exclusion from NAMA of all loans of Anglo Irish Bank;”

    ER does not understand cross-collateralisation if he wants to exclude performing loans from NAMA.

    By seeking to exclude Anglo Irish Bank from NAMA, FG are eliminating the possible good bank that Anglo may become. How ironic.

  6. @Just a Punter,

    I think it’s reasonable to expect foreign markets to perform better than Ireland’s property market. Though we need to ask if Irish buyers in foreign markets paid over the odds for their purchases. I.E. Is there any reason to believe Irish developers were better at valuing foreign investments? Below is an article from propertyweek.com. Given the location, a 70% market value decline is concerning

    “Canary Wharf Group has bought a development site in the heart of its east London estate out of receivership.

    The group has bought the long leasehold interests in 1 Park Place on 0.87 acres of land for £17.5m from the receivers to Park Place SARL. The land was bought by Irish developer Bernard McNamara in May 2007 for £55m.”

    http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3156450

  7. Thanks Karl,

    I thought his opinion piece for the Times, was the best article I have read in the last 12 months or so.

    http://www.irishtimes.com/newspaper/opinion/2010/0219/1224264799815.html

    Along with Vincent P Martin’s article in yesterday’s Times. Together, they get straight to the heart of the problem, we face in Ireland, in terms of how we can rely or depend on government, to steer us through all of this NAMA business.

    BTW, for those following the Ryanair Hangar no. 6 debacle, the Colm Barrington letter in the Letters page of today’s Irish Times was recommended.

    BOH.

  8. @zhou enlai
    “By seeking to exclude Anglo Irish Bank from NAMA, FG are eliminating the possible good bank that Anglo may become. How ironic.”
    Anglo is systemic only to our government parties. It is a reckless run-away property company that took deposits and has ruined itself at huge cost (€4Bn and counting). No one in their right mind would want to give this zombie bank a brand new body to start a whole new life of havoc and misery.

    “ER does not understand cross-collateralisation if he wants to exclude performing loans from NAMA.”
    Our government parties did not understand how to prudently run an economy and a banking system. They did not understand they had caused a Japanese lending bubble. What makes you think they understand this now?

  9. @ E65bn

    Zhou says ER doesn’t understand, you retort with “the govt dont understand”. At what point in your head are you going to understand that this isn’t politics.ie and the lowest common denominator is not the preferred result here? My guess would be ‘never’.

  10. Meanwhile, in the real world – from RTE website:

    ECB official reassures on Irish banks

    Friday, 19 February 2010 13:13

    A member of the European Central Bank’s executive board, Jose Manuel Gonzalez-Paramo, said measures taken to stabilise the banking industry, the national finances and the EXPECTED START OF NAMA ARE RESTORING CONFIDENCE in Irish banking, which should mean that Irish banks can return to the inter-bank market for normal funding needs. Mr Gonzalez-Paramo DESCRIBED NAMA AS VERY MUCH IN LINE WITH THE NEEDS OF THE BANKING SYSTEM HERE.

    This is the second post I’ve put in today quoting a high-up banking expert in Europe praising NAMA and saying it was restoring confidence. The first one was on one of the other threads, but I’ll repeat here – from RTE website again:

    COST OF STATE BORROWING FALLING – Investors are taking a more favourable view of the Irish economy due to Government action in the budget, resulting in a fall in the cost of state borrowing, says the Irish Examiner. That trend is set to continue and it is predicted the extra yield investors demand to hold Irish bonds could fall by 0.5% within weeks. Commerzbank AG said yesterday that the tough measures Ireland has taken and its ability to cope on its own with its budgetary problems should see the yield differences fall further. The spread could fall by between 80 and 70 basis points in two months after Ireland slashed spending. THE CREATION OF NAMA HAS ALSO HELPED IRELAND’S INTERNATIONAL PROFILE, said David Schnautz, an interest-rate strategist at Commerzbank in Frankfurt.

    It would be nice if those academic eggheads, who are campaigning against NAMA, and who, as far as I know, have no practical business or banking experience, took some time off from celebrating the demise of Willie O’Dea and came on here and told us why we should believe them and not Jose Manuel Gonzalez-Paramo, a member of the European Central Bank’s executive board, or David Schnautz, an interest-rate strategist at Commerzbank in Frankfurt?

    What these two distinguished persons are saying seems to be very much in line with what Eoin Bond regularly says here. He is one of the few people on this site who has practical experience in this line of business. Until recently, not being in any way expert in this field, I wasn’t sure whether Eoin or the eggheads had got it right. But, it is now clear Eoin did.

  11. @ Zhou_EnLai

    “By seeking to exclude Anglo Irish Bank from NAMA, FG are eliminating the possible good bank that Anglo may become. How ironic”

    Seriously Zhou ……… Anglo_Irish to become a ‘good bank’ – do you have a little of St. Paul’s DNA stashed somewhere? IMHO one would need to resurrect St. Paul as the Divine Chairman of the Board in order to turn Shwn-ee’s pile of sh1te into anything that could be considered ‘good’ ; ditto for Fingers Looty. Confuse_us if you jest … or maybe you are entitled to have an off-day (-;

    @JtO ……. note.

  12. Maybe FG are finally getting serious. Kenny excoriated the way NAMA was rammed through reports today’s Irish Times, business section

  13. @ JTO

    1. Many eggheads, me included (http://www.irishtimes.com/newspaper/finance/2009/0403/1224243926311.html) suggested the use of an asset management agency — that the government has, as of yet, failed to get one off the ground is one its key failings on the banking front. If you think the debate has been about whether or not an asset management agency should be used, you are wildly off the mark. Again.

    2. If you think that the passing of the NAMA bill and the eventual transfer of the assets has stabilised the Irish banking system, I’d suggest waiting a while before making that judgment.

    3. In relation to the “practical experience” of Mr. Gonzalez-Paramo relative to the academics you so dislike, perhaps before shooting your mouth off again on this, you might consider comparing this
    http://www.ecb.int/ecb/orga/decisions/html/cvgonzalez-paramo.en.html

    with the front page of this
    http://www.karlwhelan.com/cv_web.pdf

    and then explaining the differences to our readers.

    And as for eggheads versus Eoin, all I can say is that at least Mr. Bond conducts himself with a lot more class than is evident in your contributions — I mean, celebrating Willie O’Dea’s demise, come off it man.

    As you know, we permit all sorts of opinions here but I’ve pretty much had it in relation to these sort of personalised insults aimed at contributors to the site. Last warning.

  14. @Eoin JtO

    …… what’s that scurrying sound I hear around the ship … patter of little feet… ? (-;

  15. @ simpleton

    I hope your request wasn’t prompted by my post. I would have thought that a resonable amount of the readership of this blog are interested in the implications of reported property price rises in England on NAMA (and by entension the collective futures of us all).

  16. @Karl Whelan

    My reference to Willie O’Dea was a little joke. Lighten up a little. Its Friday evening, the days are getting longer, the daffodils are out and Spring is around the corner. As for Mr. Gonzalez-Paramo, I’ll be honest. I never heard of him until a few hours ago. If you’d asked me last night who Mr. Gonzalez-Paramo was, I’d probably have guessed centre forward for Real Madrid. I’m delighted to see that your CV matches or even exceeds his.

    The serious point, however, is that two high-ups in European banking, the aforementioned Mr. Gonzalez-Paramo of the European Central Bank and Mr. David Schnautz of Commerzbank in Frankfurt, are both saying that NAMA is a good idea and that it is starting to restore confidence. This contrasts with the view expressed by some posters here and by some media commentators that NAMA is just a scam by corrupt FF politicians to enrich their developer friends. The public and the non-banking-experts (of whom I’m one) who read this site are curious to know why these two high-ranking gentlemen are taking the opposite point of view. We might (I repeat: ‘might’ – I’ll put it no stronger) just possibly be seeing the first tentative signs that they are right in the figures for new vehicle sales. In the first 3 weeks of February, these are up almost 50 per cent compared with the same period last year.

  17. @Ciaran Daly
    It was good to hear Kenny speaking out.

    @David O’Donnell
    It is fitting that the first action of NAMA was to take over €10 Bn of loans given to megadevelopers by Anglo, the megadevelopers bank. NAMA was about getting additional credit flowing to SMEs? The cynicism and duplicity is breathtaking.

  18. @ JTO and HF

    Grand, so.

    Remember, though, that it’s easy for anonymous punters to come on here and swing wildly at people whose opinions they don’t like. But at the end of day, it’s guys like me that are putting a lot of unpaid time and effort into keeping the public informed via this site. Comments that castigate us as “eggheads with no practical experience” are not informed and do little to help, so I for one don’t feel under any moral obligation to continue displaying them on the site. Hence the last warning, which I stand by.

    I’ll pass on discussing JTO’s musings on the potential link between the government’s banking strategy and light vehicle sales.

  19. @ KW JtO

    Just my two cents..
    Karl has a point
    In the interests of all the “eggheads” can you put down the spoon?
    Al

  20. @JTO
    NAMA hasn’t done anything yet, so any real improvement in the Irish financing position is budget-based, not NAMA. NAMA can only impact international perception in terms of bank bond and shareholders, and this is exactly the area where opponents of NAMA complain about an immoral subsidy by the taxpayer to the bond/shareholder.

    As for car sales, it’s probably the scrappage more than anything else. Now, I’d argue for permanently lower car taxes and would bet that they’d have a similar impact on sales as the scrappage scheme. However, if the high taxes on cars are reimposed after the recession is over then the scrappage scheme is simply people who can afford new cars in the middle of a recession being subsidised by people who can’t afford new cars in the middle of a recession – which hardly counts as a good plan if fairness is what you covet.

  21. @Al, Karl Whelan

    Very well. As I have no wish to be disruptive on the site or to be a pain to those who went to the trouble of setting up the site, I will leave you in peace. I can see that that the green shoots of recovery are not what the majority of posters want to hear about on the site. As these are likely to multiply in coming months, I don’t wish to become even more of a bore by continually pointing them out. Anyway, as part of my proper job, I’m off next Thursday to sunny California for six months. So, I shall not post again until my return in early September, assuming the site survives the economic upturn and is still going then, which I hope it will be. Au revoir to one and all, especially to Eoin Bond, Stuart Blythman and Paul Hunt.

  22. @ JtO

    “Au revoir”? Shouldn’t it be more like “Later Dude!”. C’mon, get with the Calfornia lingo. Enjoy, and i’ll try to pick up the optimistic slack that will be left in your absense. Safe trip.

    @ everyone else

    by the by, talking of CV’s and experience and all that, i see Eugene Regen is a non-executive director of Goldman Sachs (Dublin & Luxembourg). I thought the general moduc operandi of people working for such organisations was to r*pe and pillage the lowly taxpayers, and the reaction of the great and good on here was to vilify their ideas and opinions and label them as nothing more than self serving etc etc etc. I mean, given how Erik Nielsen’s (GS chief european economist) opinions were roundly mocked on here, shouldn’t Eugene Regan’s also be given similar treatment? Or would that just not fit with many people’s personal opinions of NAMA, Goldman Sachs et al? Just saying…

  23. Ah John t O
    There would be no opposition without you, (and a few others)
    Dont go.
    You may have have earned bragging rights already!
    Two or three weeks of O Reily and Olbermann will have you back!
    Enjoy
    Al

  24. To all

    Indulge me for a second here.
    Although having a full and busy life, i compared Karls CV against the other gentleman.
    
    “Portrait of José Manuel González-Páramo, Member of the Executive Board of the European Central Bank
    1984
    MPhil in Economics, Columbia University, New York
    1985
    PhD in Economics, Universidad Complutense, Madrid
    1986
    PhD in Economics, Columbia University, New York”

    Two PHD’s and a research masters in three years!!!

    Karl,
    Can you match that???

    Al

  25. @ Karl Whelan,

    There is a possibility, you are the subjec to a media bombardment tactic, in order to wipe you out completely with ‘noise’ from Jto etc. It is quite possible. For my own part, I feel fine and dandy, plodding away at my own pace blogging.

    http://designcomment.blogspot.com/2010/02/ryanair-to-fail.html

    I thought that entry, might be of some use to you. It is an attempt to sort of draw together a whole pile of diverse subjects, into one unifying theory about Ireland’s economy. BOH.

  26. @All
    Tag this one, “Bank of Ireland, Chutzpah”:

    http://www.rte.ie/business/2010/0219/boi.html

    “€31m land not worth €600,000, BoI tells court

    Development lands in Athlone valued in 2006 at €31m have a current value of €600,000, Bank of Ireland told the Commercial Court today.

    The bank was rejecting arguments by a developer that the sale of those and other lands offered reasonable potential for the bank to recover €17.4m from the developer.

    Mr Justice Peter Kelly said the €600,000 figure was ‘even more alarming’ and put ‘into a cocked hat’ the judge’s own view, from his experience in the Commercial Court in recent years, that land values have fallen by between 70% and 80%.

    John Hennessy SC, for BOI, said the €600,000 valuation was the figure his side had obtained. The bank had also received a current valuation of around €4m for development lands at Sallins, Co Kildare, previously with a peak value of some €17.5m, he added.”

    What was it NAMA’s valuer said and the NAMA lobby (including many BOI heads) enthusiastically echoed:

    “John Mulcahy, an auctioneer advising NAMA on how to value the loans, told the Oireachtas committee that property values had fallen 50 per cent from their peak and the property market had reached the bottom of the cycle.”

    http://www.finfacts.ie/irishfinancenews/article_1017528.shtml

    NAMA is an exercise in establishment mass self-delusion.

  27. @The Politically Minded
    The first post on this thread on another forum by a Mr Toxic Avenger is well worth reading. It refers to an Irish Daily Mail article. They do not have an online edition otherwise I would post the original article. It concerns an amendment to “The Building Society Act of 1989”. None of the usual FF cyber unit take issue with the post and I vaguely remember it being in the news for a short time and then disappearing. A similar Irish Daily Mail story did likewise before suddenly reappearing in recent weeks.
    Well worth a look.

    http://www.politics.ie/current-affairs/51507-noel-dempsey-hypocrite.html

  28. @JTO

    Contributions on the green shoots, and just about anything else, are welcome here — how many of your contributions have been, em, moderated? So no need to take your football and walk off the field for fear of censorship. But if you’re going too busy to contribute, no problem and good luck in California.

    @ Al

    Indeed, I can’t match the two PhD thing. I bow to Mister González-Páramo superior non-practical ivory tower qualifications!

  29. @ Bond. Eoin Bond

    I assume Eugene Regan is a protégé of Peter Sutherland.

    There is surely a potential for a conflict of interest when a member of a Goldman Sachs board who is also a member of a parliament, takes a position on banking policy.

    Two days after Der Spiegel reported on Feb 8th on GS’ help in hiding billions of Greece’s borrowings, Goldman economists mistakenly reported that they had discovered a €6 billion addition to spending in December, taking the deficit for the year up to €37.9 billion from less than €30 billion previously.

    “It is a stunning revision to make,” Goldman economist Erik Nielsen wrote.

    Last month, Philip Angelides, chairman of the US Financial Crisis Inquiry Commission asked GS CEO Lloyd Blankfein if Goldman deliberately sold debt products tied to mortgages that it knew were declining in value.

    “It sounds to me like selling a car with faulty brakes, and then buying an insurance policy on the buyer of those cars,” said Angelides.

    “We were doing what capital markets do — which is making markets,” Blankfein said.

    Angelides responded that he found it “troublesome” that Goldman never took the responsibility to ensure the products it was selling were good.

  30. @Jto
    Enjoy California, at least it will be hotter than here. You can go on to Californiaeconomy.com and help them out with your stats – they have a few budgetary problems themselves.

    Hopefully when you come back those green shoots will be a lot stronger. We need to see more than light commercial vehicles with a scrappage scheme. I’m mostly interested in retail but Jan figures are likely to be distorted due to the snow. February is a brutal month anyway so March will be the first decent indicator. A friend who has run his own shop for 20 years in an established shopping centre is literally hanging in there. One more year and he could be gone. The established businesses are burning up the reserves. Anecdotally there are retailers not paying rents and no one is chasing as it will upset the whole Nama process but how many and how much who knows. A bit of hope would be good.

  31. @Michael Hennigan
    Eugene Regan is much less influential than many in the ex-FG leaders/AGs club. And way less influential than Richard Bruton, who hasn’t exactly distinguished himself on NAMA, the bank guarantee, and the establishment banking collapse response. Still, Irish public life is like the X Files. Until the opposition credibly and irrevocably guarantee to reform the whole rotten system, and do it, you are entirely correct to question everyone and everything.

    However, Regan has taken two very brave stances, shown real leadership and refused to back down in the face of bitter establishment opposition. I commend him for doing this. If Richard Bruton starts challenging the establishment I will commend him too.

  32. @JohntheO
    Off? Sign of the recession, surely – the talent leaving the country.

    It’s no fun when no one disagrees…

  33. As a general point about criticism of Goldman employees (although not the main point of this thread, so apologies if its not relevant): they do have some smart people working for them with one of their ex-employees being the current Governor of the Canadian Central Bank who is reported to have done an excellent job in managing the financial crisis http://www.bloomberg.com/apps/news?pid=20601082&sid=aQcJ7bw4QH.Y.

    The decision to appoint someone with banking experience seems to have worked out for Canada.

    “He’s handled the financial crisis brilliantly,” Donald Guloien, chief executive officer of Manulife Financial Corp., North America’s largest insurer by market value, said in a Nov. 18 interview. “The financial crisis hasn’t been as great in Canada as other places around the world.”

    Canada was the only G-7 nation to balance its budget for 11 consecutive years, before a stimulus package aimed at sparking growth pushed the country to a deficit.

    “Carney has been the right man for the times,” said Eric Lascelles, chief economics and rates strategist at TD Securities Inc. in Toronto, a unit of Canada’s second-biggest bank. “Someone steeped in the mechanics of the financial markets, connected to the necessary private and public sector players and confident enough to take the bold action.”

  34. @ Bookworm

    no no no, all Goldmans employees are evil and self serving, to admit they might be actually quite intelligent would go against a lot of personal ideologies…

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