Bacon advised distressed loans could top €158bn in govt report
The economist who oversaw the establishment of NAMA says he advised the Government last year that the amount of distressed loans to be taken onto the bad bank's books could be as high as €158bn.
Peter Bacon revealed this morning his calculation was contained in a report that he submitted to the Finance Minister in March of last year.
A month later in the emergency Budget, Minister Brian Lenihan stated the value of those loans would be less than €90bn.
"The Government decided I think that to start with €158bn was just too big and that it wasn't clear that that would be the extent of the problem, and that was correct.
"€158bn was the amount of land and development and commercial property lending in the six (financial) institutions and what the Government decided to take into NAMA was the land and development and associated investments."
He added: "There was a judgement made at that time about what the response would be…In the view of Government if you attempted to transfer €158bn of loans, you could have brought forward today to 18 months ago, and that was a judgement call."
