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NAMA petition

Trinity Professor Brian Lucey has put together a list of questions that each member of the Oireachtas should consider before NAMA is debated, the questions are reproduced below and you can follow this linkto find the petition in full with the e-mail addresses of all TDs and Senators. All you need to do to e-mail them Brian Lucey’s suggested questions and any others you may have is copy and paste the addresses into the to or cc field of an e-mail.

“As you may know I have been a significant critic of the government’s policies on NAMA. A few hard questions should be asked of all those who support same.

What evidence does NAMA have that the current market price of property, land etc is in fact the incorrect price to pay?

What evidence does NAMA have that the current market price of these is not in fact going to decline for a number of years, as would be the case if Ireland were to follow the common experience of previous property crashes?

Why would a temporary nationalisation of the banks be a bad thing, given that this would provide the taxpayer with a valuable asset which could be sold in future years?
Why does no independent analyst support the governments view on NAMA? This includes the Swedish finance minister who ran their bad bank system, who said to the Irish Times that he “favours the more severe mark-to-market write-down of assets rather than a ‘through the cycle’ valuation.”, and that “it (NAMA) does not sound like the right solution to buy assets from private banks.” It also includes the IMF who said ” Insolvent institutions (with insufficient cash flows) should be closed, merged, or temporarily placed in public ownership until private sector solutions can be developed … there have been numerous instances (for example, Japan, Sweden and the United States),
where a period of public ownership has been used to cleanse balance sheets and pave the way to sales back to the private sector”, in the context of saying that the likely losses for Irish banks were such as to render them insolvent.

Why not force the equity and bond holders in Irish banks to take the first place in the queue to absorb the losses that the banks would have to book were current market prices to be paid for the loans made. After all, that’s what risk capital is for?

If the state overpays for the loans relative to current market prices, what, apart from a functioning banking system, does the taxpayer gain?

What percentage of book value of the loans should NAMA pay, given that current market prices for land and development properties are somewhere around 30% or less of book value?

If NAMA were to pay say €60b for loans that are worth only €30b, how can this transfer of a full years tax revenue to private speculators be justified in this economic time?

If, as is entirely possible, the loans transferred to NAMA do not provide sufficient income to meet the coupon payments of the bonds issues by NAMA, will the taxpayer, at least in the short term, not have to meet these payments?”

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