Ireland: folly heaped on folly

In our previous comment on the Irish U-turn on the proposed ban on upwards-only rent revision clauses, we referred to an article in the FT giving the background to the decision. One of the reasons was pressure put on the Irish government by an organisation called NAMA, the National Assets Management Agency. This is a state body set up by the previous Fine Gael government to take over the toxic loans from the Irish banks, with the idea that the banks should be able to function “normally” again. This prevented an immediate collapse. It also made NAMA one of the biggest property companies in the world.

NAMA paid €31 billion to acquire almost €75 billion of property loans, a discount of over 58%, but prices have fallen by over 60% and are still dropping in some parts of Ireland. Consequently, the original aim of selling off the loans piecemeal at a profit has foundered. A secret report commissioned within NAMA for the Irish government and leaked to the FT, has suggested that the present strategy for managing loans needs to be tightened and that an attempt needs to be made to sell off the “assets” as a single entity.

Thus is, folly heaped on folly. Read the complete article
Dublin is urged to sell toxic loans as job lot