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Fine Gael calls for scrapping of NAMA


White Horse

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Fine Gael is calling on the Government to scrap plans to establish a National Assets Management Agency to buy up toxic debts from Irish Banks.
The party says too many disputes will emerge between developers and the agency over the value of properties purchased with these loans.
It says prolonged court battles could also push up NAMA's costs.
Fine Gael finance spokesperson Richard Bruton says a National Recovery Bank should instead be established to get credit flowing in the economy.
Fine Gael calls for scrapping of NAMA - Politics, National News - Independent.ie

NAMA is at the vanguard of the government's strategy to deal with the property pyramid scheme induced Irish banking crisis.

FG have nailed thair colours to the mast by rejecting the alternative Government and Labour proposals bail out property developers.

FG stands alone is proposing the establishment of a public owned good bank and letting the corrupt banks clear up their own mess without taxpayer subsidies.
 

Simbo67

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This is huge for Nama (and FF), there is now very clear water between FG and FF strategy
 
A

AMCW177

Clear blue water. FF and Labour both want to get the taxpayer to bail out the bankers and the builders, which will cost us at least €100 billion. Yes, €100 billion. That's not a typo.

If FG also came out and explicitly said that banks which engaged in reckless lending and through their own greed and stupidity have ended up insolvent should be allowed to fail in the normal manner like any other badly-run company then they'd romp home in any general election. They do seem to have been gradually working their way towards this position recently.

The majority of the electorate who don't work for vested interests are completely sick of all the bailouts and croneyism, that they are then expected to pay for.
 

Simbo67

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This is a pretty massive divide now between the parties, if FG can concisely present what their plan is, NAMA will look ridiculous (and dangerous)
 

cyberianpan

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This is huge news, it shows FG are really getting balls

I wasn't too fond of the way Nama was just presented as a fait accompli

Similarly FG need to take great care here, I'm a little worried that they are engaging in "back of envelope" reckonings :

We are in uncharted waters, our whole banking system has failed amidst unprecedented systemic international failure ... thus we need some serious effort to find out what will work.

I'd suggest FG set up a small working group to examine the area. This group wouldn't be a wishy-washy independent commission - it would be FG branded and FG would stand behind it.

On it I'd put:


  • Chairperson: from FG, part time
  • Senior International banker: say from UK, they would advise on what might prove practical,
  • Legal expert: from Ireland (preferably an academic with practice experience)
  • Staff economist: serious international heavyweight who would link into 2 or 3 other part time advisers
  • Staff lender: a mid level banking executive who understands loan books, risk, lending strategy, interbank funding etc
  • Property expert: Someone from the development side of the house... preferably foreign
FG would ensure that the 5 main financial institutions would release high level data to the group and also consult with it

And I'd ask that it report in weeks, say 6.

Doing something professional like that would ensure FG would have my support.


cYp
 

westkerryblue

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Old news lads, FG came out with their alternative bank at the time NAMA was set up to dig the'friends of FF' out
 

Wendy

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Clear blue water. FF and Labour both want to get the taxpayer to bail out the bankers and the builders, which will cost us at least €100 billion. Yes, €100 billion. That's not a typo.

If FG also came out and explicitly said that banks which engaged in reckless lending and through their own greed and stupidity have ended up insolvent should be allowed to fail in the normal manner like any other badly-run company then they'd romp home in any general election. They do seem to have been gradually working their way towards this position recently.

The majority of the electorate who don't work for vested interests are completely sick of all the bailouts and croneyism, that they are then expected to pay for.
I think the majority of people are completely confused about what the best course of action out of this mess is, and who could blame us? The academics are at loggerheads and nobody trusts banking "experts" any more.

So far I've heard the following proposals and associated arguments:

  • clean out existing banks and set up one "bad bank" (NAMA)
  • let the existing ailing banks fail and set up one "good bank"
  • nationalise the bigger banks
It all seems entirely speculative to me. The one argument that does convince is that allowing the bigger banks to fail will have disastrous consequences for the economy, and thus for us all.
 

Simbo67

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I think the academics are at least pretty at one that NAMA is a bad idea.
 

tenderloins1

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Very good proposal from FG. At this stage I doubt there are many people in favour of NAMA.
Aside from the vast sum of money the taxpayer will be lumbered with , neither the banks, developers and Fianna Fail can be trusted
with regard to valuations of assets and so on.

People are also afraid of Nationalisation as they dont want to take on the banks debts nor are they confident that the banks would be run for the benefit of the public rather than developers and Fianna Fail.

As for FGs proposal.
Would it be cheaper rather than setting up a new institution to nationalise one of the smaller existing institutions
such as the Irish Permanent which has a network of bank branches already in place.

Would FG still recapitalise the existing banks?

If there is seen to be a vast difference in policy over how to treat the banks and that the FG way has less potential damage than the other solutions then they and the country are on to a winner.
 

Wendy

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Richard Bruton declared.

“Under the NAMA approach there is no sharing of losses by the providers of other capital – subordinated debt and risky funding such as unsecured bonds who made good profits in the good years but who will walk away scot-free under this proposal,” he said this afternoon.


Ya wha', Richard? I guess that's why we need George Lee.
 

Simbo67

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I think you have that backwards.
The Irish Economy Blog Archive Do We Really Need a NAMA?

"While much of the recent media discussion about our banking problems has been framed as NAMA versus nationalisation, this has not been a fair reflection of the debate between economists. My four-point plan and the gang of 20 article explicitly allowed for the idea that a NAMA-like vehicle be used in conjunction with nationalisation."

Fair dues Wendy. Give it socks.
Well I hate to be pedantic, but that is different from the present government NAMA plan because it involves nationalisation
 

xt40

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Jan 30, 2009
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Richard Bruton declared.

“Under the NAMA approach there is no sharing of losses by the providers of other capital – subordinated debt and risky funding such as unsecured bonds who made good profits in the good years but who will walk away scot-free under this proposal,” he said this afternoon.


Ya wha', Richard? I guess that's why we need George Lee.
no we dont. he is saying that under nama, aib etc will use whatever money they get for their assets to pay back their iou's , rather than lending it out into the economy. he is right and those that bought aib's bonds (iou's) should be left whistling.
 

Cael

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This is huge for Nama (and FF), there is now very clear water between FG and FF strategy
Finally FG have said something sensible. A nationalised banking system is the only real possibility. FF will run us into the ground altogether trying to bail out their wealthy buddies if they are let.
 

youngdan

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This why FG are a joke and are stuck at 32%.

They reject NAMA and they reject nationalisation.

Their plan is to borrow 2 billion from the ECB and open a new bank. Their plan is The Ostrich Plan. They want the present banks to eat the 90 billion and counting losses.


Either they are stupid or they think the voters are stupid
 
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er actually no - the Communist Party does too :D
Comedy gold.

So the great, inspired, new Fine Gael policy, turns out to be what the cranky old Stalinists in Connolly Books have been arguing for ages. Nice work by the Blueshirts there. Cribbing from the Communist Party certainly counts as leaving no stone unturned in the search for a solution.

Here's the Communist Party's immediate response to the most recent budget and the announcement of NAMA. Sure enough, it opposed the creation of NAMA and instead argues for the state to create a new bank:

http://www.communistpartyofireland.ie/r-2009-04-07.html

Perhaps Fine Gael should parachute in the Communist Party's economics spokesperson to stand for them in Dublin Central?
 
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