Cowen: Nama good for taxpayers
Paying over the odds for the banks’ toxic and property loans is in the best interests of taxpayers, the Taoiseach claimed today.
Brian Cowen told the Dáil a return to bubble prices was not needed for the proposed bad-bank Nama to be a success.
Finance Minister Brian Lenihan revealed the government agency will pay out €54bn – €7bn over the current market price.
“I am absolutely certain that the proposed premium over market price is in the best interests of the Irish economy and, consequently, in the best interest of the Irish taxpayer,” Mr Cowen said.
The Taoiseach denied opposition claims the Government was mortgaging the future of Irish children, branding it a misrepresentation of the facts.
Mr Cowen argued the public will not have to pay for the day-to-day running of the agency as 40% of the distressed loans generate money.
This will help cover interest payments on the Nama bonds and the scheme’s operating costs.
Giving a breakdown of the assets on the banks books, the Taoiseach said 36% was tied up in land, 28% in development property and 36% in commercial loans.
Mr Cowen said the €54bn payment was a substantial discount and ensured only a moderate boost in property prices was needed for the agency to break even.
He said the bad bank scheme was the best approach to deal with the country’s beleaguered financial sector and again denied it was a bail-out for developers or banks.
“If there is one message I want the House and the citizens of this State to be absolutely clear about it is that Nama is not designed to be and will not be permitted to operate in practice as a bail-out mechanism for anybody who has operated irresponsibly,” he said.
Mr Cowen also announced a new director of financial supervision would be appointed in the coming weeks under new regulatory reforms of the sector.
