July 2010

NIRSA Ed Op piece in today’s Irish Times.

As well as a catastrophic failure in Ireland’s banking and financial regulatory system, there has been a disastrous failure of the planning system. The Government has two principal levers through which it can regulate property development. The first is through fiscal policy with respect to regulating access to credit and determining taxation rates. The second is through planning policy, the zoning of land and the granting of planning permission.

Explanations of the Irish property bubble have focused almost exclusively on the former while, to date, the role of the planning system in creating the property bubble has been little considered. And yet, the banks could have lent all the money they desired, but if zonings and planning permission were not forthcoming, then development could not have occurred in the way that it did.

In a housing boom, planning should act as a counter-balance to the pressures of development to maintain a stable housing market and try to prevent boom-and-bust cycles. Planning should provide checks and balances to the excesses of development and act for the common good, even if that means taking unpopular decisions. However, during the Celtic Tiger period a laissez-faire approach to planning predominated at all levels of governance.

Planning decisions were not sufficiently evidence-based, and in many cases did not take account of realistic long-term demographic demand, market conditions or issues of sustainability. Cautious voices were marginalised and ignored.

Both the fiscal and planning levers of development were overly pro-growth.

As a result, not only was there an unsustainable growth in property prices, but this was accompanied by a property building frenzy that led to a significant oversupply of housing (as well as of offices, retail units and hotels) in almost all parts of the country. Between January 1996 and December 2005 more than 550,000 housing units were built. In the same period, the number of households grew by just 346,000.

Yet from 2006 to 2009, 244,000 new units were built, despite a vacancy rate of 12.2 per cent, excluding holiday homes, in 2006.

While local authorities like Fingal, Kildare, Galway city, Meath, Wicklow and south Dublin did a reasonable job at keeping supply and demand aligned, others did not heed good planning guidelines and regional and national objectives; did not conduct rigorous demographic profiling of demand; and did not take into account the fact that much of the land zoned lacked essential services such as water and sewage treatment plants, energy supply, public transport or roads.

Instead, permission and zoning were facilitated by the abandonment of basic planning principles by elected representatives on the local and national stage and driven by the demands of local people, developers and speculators and ambitious, localised growth plans framed within a zero-sum game of potentially being left behind with respect to development.

Further, central government not only failed to adequately oversee, regulate and direct local planning, but actively encouraged its excesses through tax incentive schemes and the flaunting of its own principles as set out in the National Spatial Strategy through policies such as decentralisation.

The level of over-development that has occurred could take years to correct and seriously hamper the recovery of the housing market and the operation of Nama.

At the National Institute for Regional and Spatial Analysis, we are calling for an independent review of the operation of the planning system during the Celtic Tiger years to be undertaken to consider fully the role of planning in the creation of the property bubble, similar to the Honohan (2010) and the Regling and Watson (2010) reports on banking and financial regulation.

The review would examine planning policy formation and application and the organisation, operation and regulation of planning within and across different agencies and at all scales in Ireland. It would investigate all aspects of the planning system and its operation, including the extent to which there was: joined-up thinking between agencies and authorities; high-quality data and evidence-informed decision-making; strong levels of oversight, monitoring and control of clientelism and cronyism at play in the system.

The inquiry should not take the form of a witch-hunt or a blame game, but rather constitute a systemic review of how the planning system failed to counter and control the excesses of the boom and provide a more stable and sustainable pattern of development.

There are seven key issues that need to be addressed before consumers regain confidence, property prices bottom out and the housing market starts to function properly.

Supply and demand will need to be harmonised. There has to be a sustained growth in the economy with an associated fall in unemployment. House prices have to align more closely to average industrial earnings. Affordable credit has to be available for first-time buyers and those trading up. The uncertainties concerning Nama and its operation have to be dispelled, especially since it will be controlling a sizeable share of property and land. This necessitates full transparency of the agency’s workings and the assets it is managing.

Consumers have to be satisfied that the banking crisis is truly over and that financial institutions are properly regulated. And, finally, substantive changes need to occur in the planning system to ensure that it works for the common good and produces sustainable development.

In the short term, we need a clear plan of action to deal with ghost estates and to implement this plan speedily. This should include addressing the social and economic conditions of those living on such estates and a full assessment of alternative uses.

Our analysis suggests that there is little need for housing development in the State in the immediate future beyond selected social housing provision. This is not to say that there is no requirement for construction, however.

Where construction could be fruitfully undertaken is with respect to public facilities like schools and hospitals, public transport, roads, energy and broadband infrastructure.

Such a targeted capital investment could, on the one hand, stimulate the economy in terms of employment and investment and provide multiplier effects across the private sector and, on the other, provide world-class infrastructure to facilitate and encourage indigenous growth and inward investment. Any such investment should align with the National Spatial Strategy and National Development Plan and be delivered through a rigorous, responsible and sustainable planning system.

Rob Kitchin, Justin Gleeson, Cian O’Callaghan and Karen Keaveney

NIRSA Working Paper 59: A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland

RTE Prime Time: A Haunted Landscape


The NIRSA Working Paper 59 – A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland – was published this afternoon.  It will be discussed on Prime Time tonight at 9.30pm.  Discussed on Morning Ireland earlier today.

According to the 2006 census there were 51,441 housing units in Cork City of which 6167 were vacant (exc. holiday homes).  Between Apr 06 and end of 2009 the DEHLG housing completion data reveals an additional 3,579 units were built.  To put that in perspective, in 1996-2006 the number of households increased by 2,636 well below the vacancy and new build rates.  At the same time, Cork’s development over the last decade offers one of the best examples of plan-led development in Ireland. The Cork Area Strategic Plan and the Cork Docklands Development Strategy both aimed to implement an approach to development that was coordinated at the urban and regional levels, and aimed to stimulate growth that was in line with NSS guidelines and best practice in spatial planning.  So, if Cork followed an evidence-based approach to planning for development, why is it now suffering such high levels of vacancy?

There are a range of factors that influence this.  For one, development in Cork has suffered from unfortunate timing.  For the last decade, the projected growth expected from the docklands project has informed the scale and type of development in Cork city.  Cork is not characterised by urban density and does not have a legacy of apartment living.  The docklands project sought to fundamentally alter this pattern.  The project planned to stimulate the growth of the knowledge economy in Cork city by providing new office spaces in the docklands.  Additionally, the docklands would provide a range of new amenities (schools, parks, crèches, bars, restaurants, cafes) that would encourage both single residents and families to live and work in the city centre.  By the time the recession hit, the docklands project had yet to really get off the ground.

However, the developments that had happened in the city had based themselves on these projections.  Thus, developments like the Elysian that aimed to capitalise on the emerging trend towards apartment living were coming on stream at a time when the property market was imploding, making them an even more risky proposition in that they not only had to contend with a distressed market but also battle against entrenched consumer preferences.  At the same time, new housing estates were being developed in the suburbs.  Many of these came on stream at the wrong time.  Additionally, many prospective buyers had been priced out of the market as property prices soared, forcing them further out into the county.

Similarly in the County, expected growth was predicated on the designs of the CASP to create a commuter zone around the metropolitan city region.  Many speculative housing developments sought to capitalise on these trends.  Both the CASP and the CDDS are long-term strategies that were only beginning to see tangible results over the last three or four years.  As such, the recent surge of development interest in Cork was unfortunately in synch with the crash.

While these projects were certainly based on a strong rationale couched within the logic of spatial planning, it should also be said that the levels of growth expected from these strategies was excessive; the outcome of entangling reasonable and sensible projections with the fever dream of the Celtic Tiger.  Furthermore, even though Cork attempted to implement an evidence-based forward planning approach parts of the city and county were also characterised by the type of ad-hoc and clientalist developmental practices seen in other counties.  As David Counsell suggests in his study of the CASP, while on paper the plan suggested a coordinated effort by City and County Councils to plan and manage the growth of the region, the actuality was more fragmented.  Local Councillors still managed to rezone land for  development in towns and villages upon which massive housing estates were built that were in excess of reasonable demographic projections and against the objectives of the CASP.  Many of these developments are now unfinished ghost estates, while others are situated in areas without proper social provisions.

Rather than indicating the futility of evidence-based planning, the case of Cork demonstrates the problems associated with the fragmentation of the Irish planning system.  In the absence of joined-up planning, local authorities have only limited abilities to guide development in coordinated ways, and are often at the whim of local Councillors and developers.  While Cork certainly was not immune from the frenzied over-development of the Celtic Tiger period, the fact that to a certain extent this development followed a coherent plan means that in the long-run this may not be as destructive as in other counties, where development has left run amok without rhyme or reason.  Furthermore, it speaks more fundamentally about the difficulty of implementing a strategic approach to planning in the Irish context.  Because of the vagaries of planning structures and the lack of statutory regional policies, strategic planning is constantly challenged and undermined.

Cian O’ Callaghan and Rob Kitchin

As noted previously on IAN the 2009 Planning and Development (Amendment) Bill seeks to require that future decision-making by Local Authorities on planning issues is consistent with national and regional policy objectives.

A core element of the Bill is the introduction of ‘core strategies’ in City/County Development Plans. Statements of core strategy are required to demonstrate the conformance of proposed developments to national policy objectives. In this way City/County Development Plans will be required to provide a rationale for both existing and proposed residential and mixed-use zonings, including an indication of the proposed number of housing units to be accommodated on residentially zoned land. This requirement will potentially make it increasingly difficult for councillors and Local Authority management to zone large areas of land irrespective of the demand for housing within the locality or region and ensure consistency between the written statements of Development Plans and the associated zoning decisions of councillors, something which was often absent in the past (see for example Meath 2001 County Development Plan).

Regional Planning Guidelines for the Greater Dublin Area 2004-2016: Settlement Strategy (An example of a spatial strategy)

Spatial Distribution of Urban Development in the Greater Dublin Area: 1990-2006 (Source: MOLAND land-use datasets, analysis and mapping by the author) (An example of an evidence base)

The Bill also makes provision for an enhanced monitoring role for Regional Authorities. Regional Authorities are given an explicit role in the Development Plan preparation process, tasked with ensuring consistency with Regional Planning Guidelines (and effectively national policy). Significantly this enhanced role and responsibility for Regional Authorities is premised on the introduction of an executive role for Regional Authority staff. Currently the only official ‘voice’ of a Regional Authority on planning matters is that of the members (i.e. nominated councillors from constituent Local Authorities). This enhancement of the executive role of the Regional Authorities may, however, have significant resource implications, as existing capacities in terms of planning, research and policy development are quite limited.

The extent to which the Planning Bill (assuming it is enacted following the summer break) heralds a radical shift in planning practice remains to be seen. City/County County Plans in most cases include statements of consistency with regional and national policy and population and housing projections which are also generally broadly consistent with the NSS and Regional Planning Guidelines. In terms of implementation of the Planning Bill, the emphasis must be placed on monitoring, ensuring draft Development Plans are in conformance and more critically ensuring decision-making by Local Authorities on development proposals fully takes account of regional and national policy frameworks.

In particular, it is necessary for Local Authorities to assess whether a development proposal responds to an actual demand or need that is not already catered for by existing developments or proposed or developments, whether they are in the same Local Authority area or not. It is imperative that Local Authorities and An Bord Pleanála begin to refuse planning permissions on the basis that the demand for particular types of development is satisfied by currently and existing proposed developments. This criteria is over and above any consideration of consistency with Development Plans, Local Area Plans, or Regional Planning Guidelines which may have been produced five or more years prior to the time of decision-making on individual development proposal.

The experience over the last number of years has demonstrated all to clearly the outcome of incremental decision-making that does not have due regard to the bigger picture at regional and national levels, both in terms of the location and quantity of development. Strategic evidence-informed planning in this context requires a step beyond considerations of consistency with national policy objectives to decision-making based on a continuous monitoring of spatial development patterns and trends. Such a shift in planning policy and practice may require the development and application of a new spatial data infrastructure creating new challenges and opportunities for social and spatial science researchers as well as policy-makers and practitioners.

Cormac Walsh

Since NAMA was first mooted there has widespread concern as to whether it’s the right vehicle to deal with the banking/property crisis and whether it can succeed.  In broad terms, analysts are worried about whether the NAMA strategy and business plan can deliver over the next 10+ years  given the make-up of the portfolio (particularly given the geography of assets and the amount of land and redundant property such as ‘zombie hotels’), the extent of the property crash and its continued slide, the sums being paid by the state to the banks for their ‘assets’, the validity of ascribed long-term economic values and rent yields, and the veracity of underlying economic models and calculations.   Others question the fact that NAMA is paying a notional long term economic value rate rather than present market prices, thus second guessing the market and inflating the transfer to the banks at the state’s risk; and that to recover the state investment the property market will need to be re-inflated, which will mean the re-inflation of the surrounding apparatus of interests in banking, property, planning, and government.

For those on the Right, NAMA represents state interference in the logic of the free market, disrupting its ‘natural’ recovery by artificially controlling large elements of the property market and protecting failed developers and speculators in the short term who otherwise would have gone bust, thus blocking the growth of more resilient players or new start-ups.  For those on the Left it protects those who created the crisis but it does nothing to protect ordinary home owners who are also underwriting NAMA’s costs.  Moreover, it is employing as experts (bankers, estate agents, property consultants, planners, lawyers) the very same people who acted irresponsibly to create the bubble, some of whom are overseeing transfers from their former employers.  These experts are being handsomely rewarded for their services.  Further, NAMA is exempt from freedom of information requests and, despite managing a vast amount of state managed assets, it is particularly opaque in its operation.

Given the commentary and debate in the media, and on blogs such as Progressive-economy.ie, irisheconomy.ie, NAMAwinelake, IAN, and others, these all seem like legitimate concerns.  One more issue raised its head yesterday that adds to the debate about potentially paying over the odds for impaired assets – an assertion by Ciaran Cuffe after the conclusion of the Senead debate on the Planning and Development (Amendment) Bill, who stated that 70% of all zoned residential land will be dezoned over the next six years.  Presumably this will mean that a large proportion of the land in the NAMA portfolio will potentially be dezoned, thus rendering it worth a fraction of what it used to be worth.  Savills reported yesterday that development land has fallen 75-90% in value.  If the land is also dezoned it is likely that 90%+ is nearer the mark, especially outside the principal cities. The Savills data suggests what has long been known, that the haircut for land has to be significantly above the 50% average presently being paid.

The dezoning issues is more thorny, however.  NAMA has no way of knowing in advance what land will and will not be dezoned.  Therefore does it pay a rate based on present zoning, or does it try to pre-guess what parcels of land are likely to be dezoned, or does it work on the principle that a land asset will be dezoned, or does it try to force the planning system to only dezone non-NAMA assets?  If it pays on the basis of land being zoned and it is then dezoned then it will have paid over the odds for an asset that is highly unlikely to ever pay back the amount paid for it.  Whilst Cuffe might be doing the right thing with respect to trying to get the planning system back in order, the decision to dezone land might significantly impair the the potential for NAMA to succeed.  It’s a hell of a conundrum and in my view it needs some attention, with NAMA and DEHLG needing to get together to work through potential issues for both sides.  If its not worked out then the danger is that it’ll be the taxpayer once again picking up the tab.

Rob Kitchin

The ESRI released their Quarterly Economic Commentary today.  The Summary is here and the press release here.  Basically they see the situation stabilising this year and improving slightly next year.  That doesn’t sound too bad, but some of their data and conclusions are, I think, very worrying.  Here’s what they say about GDP/GNP:

  • “For 2010, we expect GDP to grow by ¼ percent in volume terms; the corresponding figure for GNP is for a fall of ½ per cent.
  • For 2011, we expect GDP to grow by 2¾ per cent and GNP to grow by 2¼ per cent. While this return to growth is to be welcomed, it should be seen as a modest pace of growth.”

The government deficit will be 11.5% of GDP in 2010, but will rise to 19.75% because of bailout for Anglo Irish Bank and INBS (19.75% is a massive amount of debt).  They suggest it will be 10% GDP for 2011 if austerity measures are implemented.  They argue against stimulus packages based on the possible costs per job.  They think that investment in education and training would be a better bet.  I’d be sceptical that by training people jobs will magically appear and the benefits to stimulus are savings on welfare, real outputs, the creation of infrastructure that will aid indigenous companies and attract FDI, and multiplier effects across the private sector.  Whether the markets/banks will be prepared to lend for stimulus programmes is a different matter.

With respect to employment, ESRI expects it to average about 1.85m for 2010 and 2011, with unemployment averaging 13.25% in 2010 and 13% in 2011.

The statistic that stands out most for me, however, is the prediction that 120,000 people will emigrate: 70,000 in the year ending April 2010 and 50,000 in the year ending April 2011.  This will take us back to the kinds of numbers emigrating at the end of 1980s.  Such emigration wi’ll provide a little bit of a safety valve on welfare payments, but the country will also lose a cohort of relatively young workers, many of them well skilled.  And it will exacerbate the housing supply issue and potentially slow up recovery there.  Given the state of the economy and levels of unemployment in lower age groups such emigration is no surprise, but it will have ripple effects in coming years.

We desperately need a jobs programme – not aspirational statements – but an actual programme with an associated strategy and road map, and it to be implemented and driven forward.

Rob Kitchin

Most of the material discussed in Ireland After Nama focuses on Ireland and doesn’t look beyond our shores. That’s fair enough, I suppose: the Irish crisis is severe; this blog is mostly written by Irish-based academics; our remit is Ireland after Nama; etc. But it’s hard not to look out and see that the storm clouds are still developing. The US is far from surging back to growth, as some in Ireland had hoped. Demand from China’s not exactly causing unemployment to fall. The Greek crisis rolls on and the Euro-zone economies look far from being in the clear. There’s lot to chew on here. But there are lots of other stories from elsewhere worth pondering. Here are three.

One is the story of the Nicholsons, a US family whose American dream has turned sour. Unlike Gandpa and Pop, young Scott Nicholson has poor job prospects, despite a good degree. He’s had no luck finding work since graduating in 2008. Things are so bad, he’s thinking of emigrating. Imagine that.

Krugman despairs. He’s appalled at the austerity ideologues – the coalition of the heartless, the clueless and the confused – who think saving capitalism means slashing spending (including on unemployment benefits) and just letting the unemployed get on with suffering. He also singles out Ireland here. Contra those in the financial media who applaud Cowen and Lenihan, Krugman says they’re doing more harm than good:

Ireland has been a good soldier in this crisis, grimly implementing savage spending cuts. Its reward has been a Depression-level slump — and financial markets continue to treat it as a serious default risk.

Elsewhere, Krugman makes a similar point:

All that savage austerity was supposed to bring rewards; the conventional wisdom that this would happen is so strong that one often reads news reports claiming that it has, in fact, happened, that Ireland’s resolve has impressed and reassured the financial markets. But the reality is that nothing of the sort has taken place: virtuous, suffering Ireland is gaining nothing.

Of course, I know what will happen next: we’ll hear that the Irish just aren’t doing enough, and must do more. If we’ve been bleeding the patient, and he has nonetheless gotten sicker, well, we clearly need to bleed him some more.

How much more blood is there?


A second story – one which doesn’t mention Ireland but which resembles the dilemmas facing the Irish state – starts in South Africa but looks globally. At issue here is valuing the South African currency, the Rand. There’s an age-old debate there about whether it’s too high or low against the Dollar. Some call for defending it. Others say that’s lunacy. One factor in the calculation is SA’s peers. But SA has two economies: one is ‘first world’ and the other is ‘third’; one looks like it’s ‘developed’ and from the West, while the other looks like it’s developing and far more Eastern. Tim Cohen in SA’s Business Day contributes to the debate by flagging some work by an influential economist in SA, Michael Power. Power discusses the new global labour surplus. The idea is that there’s simply not enough work for all the people across the world who’ve been proletarianized and have come into the labour force in recent years. Peasants have left the countryside. Cities have swelled. There are 3 billion would-be workers now [who’ve done a lot to help depress wages for those workers who preceded them, which is central to understanding the current crisis, as David Harvey notes here in a cool adaptation of one of recent lectures]. But there aren’t the jobs for all the 3 billion. Capitalists haven’t a need for so many workers. What will the would-be workers do? And so what should states such as SA’s do? How to find the right level for wages? What is the best valuation for its currency? Is it to look West or East to find its peers?


A final story: ING economists think the unthinkable and ask what would happen if the Euro dies in 2011? Their answer:

The euro could slump from around $1.20 in 2010 to $0.85, close to its previous low in 2001 […] while if the euro were to break up altogether the ING analysts expect “huge volatility” in the currencies that are created to replace the euro. For instance, the Spanish peseta, Portuguese escudo and Irish punt could devalue 50% against the new Deutsche mark.

Gulp. Maybe this would solve the Irish government’s public sector pay crisis. But it’d probably complicate other things just a little. Certainly, it’d require a few more lawyers and accountants to scurry to Nama’s door to offer their advice. Would the (new?) Irish government manage to re-finance all the Nama bonds from Euros to Punts?  What price would be offered from potential buyers of the so-called assets in the Nama portfolio? How would the new Punt affect the expectations of profits that Nama hopes to make?


Lots of questions.  Alas, no answers from me.  The joy of blogging.

Alistair Fraser.

The 2010 Q2 Dublin Retail Market Review has just been published by CB Richard Ellis.  Whilst acknowledging the drop off in retail sales, footfall and rent over the past couple of years, it suggests that the retail market in the capital is stabilising and starting to grow tentatively, although there is still downward pressure on rents which have dropped 47.5% in prime locations (see graph below).   Retail rents on Grafton Street are now back down to 2003 levels.

The pipeline for retail developments are also, not unsurprisingly slowing.  51,000 sq.m of shopping centre space will be completed by the end of 2010, and only 19,000 sq.m in 2011, with no retail park space in either year.  By the end of 2010 there will be over 2m sq.m of shopping centre space and 1.32m sq.m of retail park space in the state.  Indeed, as the graph below shows, shopping centre and retail park space has doubled since 2005, just in time for the recession.  Whilst vacancy remains low on the prime city centre locations such as Grafton Street and Henry Street, it is higher in newer suburban and small town locations around the country.  It would be good to get overall retail vacancy levels and empty floorspace for the country. (If anyone has a source for such data, I’d be grateful for the info.)  One suspects that it is a couple of hundred thousand sq. m’s, most of which is destined for NAMA and possibly has no immediate future until the economy is well on the road to recovery, unemployment is falling, and people have disposble income to spend (and even then might be surplus to demand).

For more information see the CB Richard Ellis report, which has a load more data and analysis.

Rob Kitchin

As expected, a challenge has been launched against the legality of the NAMA state agency and the policy of all loans of €5m or more being transferred to the agency from the five banks, regardless of whether they are performing or not.  Developer Paddy McKillen is seeking to prevent the transfer of personal and business loans from 15 companies being transferred to NAMA from Bank of Ireland and Anglo Irish Bank.  His reasoning is that it will negatively affect his business interests.  One interpretation of that is that NAMA won’t let them get away with some of the kinds of arrangements that developers seem to have had with the banks over the past few years and be more rigorous in how they oversee their finances and business plans.

Admittedly NAMA tars all businessmen and developers with the same brush, and they are all having to participate in NAMA whether they have been reckless or lawless or not, which may seem unfair to some of them. Nonetheless it is developers, bankers and politicians who got us into this mess, and if we start trying to disentangle them and create loopholes for certain parties/assets, you can be sure that all and sundry will be trying to find ways through to ensure that they retain the good, performing stuff and the taxpayer, through NAMA, will hold all the dead weight in the system.

For NAMA to stand any chance of working it has to performing assets as part of its portfolio.  We’ve already seen over the past couple of days the effect of a downgrading of the number of performing assets on the likely success of the agency.  NAMA is supposedly a plan to save the banks and inject liquidity into the system and try and save the state/taxpayers billions of euro.  It is meant to act for the collective good of the nation.  It may well need revisions to its strategy and implementation, but enabling the selective transfer of assets is unlikely to aid anybody with the exception of developers and their interests. It’ll be interesting to see the outcome of this and other challenges going forward as its going to potentially open the ‘individual rights vs collective good’ debate.

Rob Kitchin

NAMA s due to produce a new business plan this week.  It is speculated in the Irish Times that it will lay out three revised scenarios.

“In a worst-case scenario, Nama could end up losing several hundred million euro. If that is the case, the Government will levy the five participating banks – AIB, Bank of Ireland, Anglo Irish, EBS and Irish Nationwide – in an effort to make up the shortfall. In a second case, it could gain several hundred million. In a third ‘very best case’, it could make ‘a couple of billion’.”

It seems to me that the first case is not the the worse-case scenario.  If a ‘very best case’ is making a couple of billion, then it seems to me that a very worse case is losing a couple of billion, or several billion.  The government has consistently over-estimated the tax returns over the past couple of years, and there is nothing to suggest that they will get the NAMA estimates correct, especially since they’ve already downgraded the return by €4.8b and they are claiming to be ‘shocked’ by the state of the portfolio and its loan book.  Until the full loan book has been transferred in, it seems the best the agency can do is produce semi-informed guestimates about the state of the portfolio and whether it is going to cost the taxpayer dearly over its projected 10 year lifespan.  Losing €4.8bn in a year is not a good start and hardly inspires confidence.

Rob Kitchin

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