The Irish Times today (Dec 17th) features an excellent opinion piece (here) by Karl Whelan dispelling the myth of NAMA’s abilility to “get credit flowing”. A number of recent developments in the “NAMA-story” outlined in the article give a glimpse of how the key actors have been weighing up the odds. In particular, the comments emanating from AIB and BOI indicate that their interest in NAMA is along the lines of gaining perceived credibility in the eyes of the international financial markets rather than increasing domestic lending, while it seems the ECB wants to see the Irish government take an ECB-endorsed course of action but without the ECB itself being called upon to bankroll it. None of this augers very well for the general public, of course. What’s more, as Karl Whelan notes, it seems that the problem of undercapitalised banks (which NAMA was created to tackle) still hasn’t been addressed.
Declan Curran
Ireland after NAMA 
December 17, 2009 at 2:25 pm
Declan, what’s most worrying about this article is this:
“The bankers… had a completely different story from the manna-from-ECB line that the Government had spent months peddling.”
This is saying that the government lied to us about the purpose of NAMA, which if you remember, was going to solve all of the problems then extant. They’ve chopped their work into three: Lisbon 2, NAMA and then the budget. They’ve been hermetically sealed from each other as issues all with the common refrain: there is no alternative.
December 17, 2009 at 2:48 pm
Agreed. Its quite alarming to compare the pre-NAMA (and also pre-Lison 2 and pre-budget) rhethoric with the comments that emerge after the event. I thought it was unbelievable that Eugene Sheehy (AIB) was so candid to the oireachtas when he rubbished the notion of NAMA as a means to facilitate additional domestic lending. Even the banks seem to have stopped pretending!
(http://www.irishtimes.com/newspaper/finance/2009/1126/1224259484041.html)
December 17, 2009 at 3:55 pm
This just highlights what a con job it is. Lenihan was still peddling the rhetoric about domestic lending in his budget speech though. NAMA was always just about recapitalising the banks, but to me it seems that it was enticing for the government because it requires them to do next to nothing once it was set up – just step back and let NAMA and the banks sort themselves out.
December 17, 2009 at 4:10 pm
Cian, is NAMA then just a special purpose vehicle, i.e. ‘special’ meaning leave the bansk to it?
December 17, 2009 at 7:26 pm
Eoin, well as Declan pointed out in response to Rob’s post on ‘International Misery Index’ the ‘special purpose’ of the ‘special purpose vehicle’ is to keep the NAMA debt off the books so that the country doesn’t look as economically unhealthy as it is.
My hunch would be that the state aren’t going to interfere too much with NAMA and what can they really do with the banks once they’ve handed over the money? It’s just another injection of cash without any attempt to tighten up regulation. The banks will do what they want with the taxpayer’s money after that.
December 21, 2009 at 12:08 pm
[…] inordinately high many of these businesses are precluded from making a profit anyway. Moreover, the freeing up of domestic capital was never the aim of NAMA. In the meantime, Cork looses another highly valuable cultural resource. The myopic focus on […]