‘Bad bank’ to the rescue
(01 April 2010 – Europe) The National Assets Management Agency (NAMA) has announced plans this week to clean-up the nation’s struggling banks, revealing it would pay €8.5 billion (A$12.4 billion) to acquire over 1,200 loans valued at €16 billion.
NAMA said that it anticipates it will buy €81 billion of loans from Ireland’s five largest financial institutions over the next twelve months, in a desperate bid to spare the nation a major debt crisis.
The government will receive the debt at around 47 percent of its actually value; rumours were circulating that the discount would be no higher that 30 percent.
The debt was largely constructed of bad property loans that were capable of bringing Ireland’s financial system to its knees during the crisis, most of which originated from Anglo Irish Bank.
The National Asset Management Agency, now labelled ‘bad bank’, also purchased loans from Allied Irish Bank, Bank of Ireland and the building societies ESB and Irish Nationwide.
Nama said it expects to have completed the transfer of the remaining loans from all five institutions by the end of the year and no later than the end of February 2011.
The government will receive the debt at around 47 percent of its actually value; rumours were circulating that the discount would be no higher that 30 percent.
The debt was largely constructed of bad property loans that were capable of bringing Ireland’s financial system to its knees during the crisis, most of which originated from Anglo Irish Bank.
The National Asset Management Agency, now labelled ‘bad bank’, also purchased loans from Allied Irish Bank, Bank of Ireland and the building societies ESB and Irish Nationwide.
Nama said it expects to have completed the transfer of the remaining loans from all five institutions by the end of the year and no later than the end of February 2011.
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