THE NATIONAL Asset Management Agency (Nama) could clear a key regulatory hurdle as early as today as the European Commission’s scrutiny of the scheme nears its conclusion.
Amid rising expectation that a go-ahead from newly installed competition commissioner Joaquin Almunia is imminent, the asset recovery plan is very close to sign-off following a routine internal review by other divisions within the EU executive.
Mr Almunia is widely expected to clear the central thrust of the scheme, under which the State will take charge of €54 billion in property assets from the banking sector.
It remains unclear, however, whether he will demand minor amendments to operation of the “bad bank”. Nevertheless, the Government is said to be increasingly confident that this will not be a major change to the architecture of the plan.
The Government notified the scheme to the authorities in Brussels on December 28th. In a parallel but separate State-aid process, restructuring plans from Allied Irish Banks, Bank of Ireland and the nationalised Anglo Irish Bank are also under scrutiny in Brussels.
Although sources briefed on the commission’s deliberations on Nama said late yesterday that officials were preparing to hand down the ruling today, they added that last-minute delays could not be ruled out.
The decision could come early next week if it is not made public today, they said.
Once approved, Nama is likely to move very quickly to begin the process of acquiring loans from the banks.
Although the commission approved a German asset recovery scheme last year, Nama is broader in its scope.
At issue in the imminent ruling is the structure of the overall scheme, something that was the subject of prolonged dialogue between Irish and EU officials when the legislation was being prepared.
Even after the expected sign-off, however, a large number of Nama’s transactions will be subject on a case-by-case basis to EU approval and audit. The aim here is to ensure that the individual deals made by Nama comply with strict EU rules on the treatment of impaired assets in asset relief schemes.
The price at which loans are required will ultimately determine the loss incurred by each bank on the loans that move to Nama. In turn, this will determine each institutions’ requirement for new capital to bolster their reserves.
Five days ago, Minister for Finance Brian Lenihan took a 16 per cent stake in Bank of Ireland through the National Pension Reserve Fund after the commission banned the bank from making certain interest payments to the State.
