Author: Karl Whelan

Happy Birthday to the Guarantee!

I think we’d be remiss if the blog failed to mark the one-year anniversary of our Bank Guarantee Scheme or, as I like to call it, the initiative formerly known as “the cheapest bailout in the world so far.”

Useful points for discussion might include whether the guarantee was a brilliant move that saved the country from ruin (as our small but dedicated band of Lenihan fans will most likely view it), whether it should have included Anglo Irish Bank, whether it should have included subordinated bonds, and whether it should have applied to all existing liabilities or been limited to deposits plus new bond issues.

Bloomberg Article on NAMA

Thanks to commenter Blake for flagging this article from Bloomberg about the NAMA plan.

The reference in the article to the original US Trouble Asset Relief Plan (TARP) is a useful one in light of our current public debate and one that I’ve thought about blogging about a few times lately. It is indeed the case that US Treasury Secretary Hank Paulson wanted to use large amounts of US taxpayers money to purchase distressed assets from US banks, an idea that sounds a lot like NAMA. However, the US Treasury ended up deciding that a better approach was to use the funds to purchase equity stakes in banks for the taxpayer. There were various criticisms at the time that the terms of these equity purchases were too generous to exisiting shareholders but it seems now as though many of these deals will provide a decent return to the US government.

There are, of course, numerous difficulties in comparing bank rescue schemes across time and place but I think the TARP story is still instructive.

G20 and Reforming Banking Regulation

The communiqué for the latest G20 summit is available here. It contains lots of the usual waffle about co-operation on this that and the other, but I think the most important element of the discussions relates to the reform of banking regulation.

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Ronan Lyons on NAMA and Property Prices

Following up on his earlier work, Ronan has an interesting article in today’s Irish Times. Link here.

Many Questions Remain About NAMA

I know we’re all suffering from NAMA fatigue and I’m not sure I have it in me to write too many more posts on it. Still, I do want to flag that, independent of arguments about the merits of the plan or not, it is extraordinary how little we have been told about how the plan is going to work or about the basis for the estimates released last week. I don’t have time to get into it all but here’s a list of unanswered questions.

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