THE NATIONAL Asset Management Agency (Nama) will pay market value for some of the loans it acquires from banks, Minister for Finance Brian Lenihan said yesterday.
But Mr Lenihan insisted that the agency would not be used to benefit property developers or banks.
Speaking on RTÉ radio's Morning Irelandshow, the Minister indicated pricing for the loans was almost completed. "There are some assets that will not go beyond their market value . . . and therefore must be pegged at current market value," he said.
Speaking after the publication of the legislation, Mr Lenihan insisted the agency would not be paying “bubble property prices” to the banks for the loans and he expressed confidence that in the long term Nama would be able to operate on a break-even basis.
Mr Lenihan said that an overall figure for loans would be announced in mid-September when the Bill comes before the Dáil. “We are working on the valuation of these properties . . . the approximate estimated figure for how much State bonds will be required to be issued in the Dáil in September.”
He confirmed that there will be a full debate on the legislation when it comes before the Dáil and stressed he was willing to look at “any methods of amendment which would strengthen accountability and transparency.”
Mr Lenihan reiterated that Nama would not be used to benefit property developers or banks.
“If you look at the historic value of the properties secured by all these loans, then clearly if you take them at a peak in 2006, there’s been a considerable reduction in their value since . . . the whole nature of this operation is that it is the developer and the bank that takes the first hit, not the taxpayer,” he said.
Under the proposed legislation, banks will be entitled to appeal the prices paid for loans by the agency to a valuation panel which will report to the Minister.
Mr Lenihan insisted that the banking crisis was “entirely separate” to the financial crisis affecting the country and he criticised Opposition parties and trade union leaders for suggesting that this was the case.
“It doesn’t serve us in this economic crisis for anyone in positions of responsibility to be suggesting that people are paying increased income tax levies, or taking a greater burden, as they are taking, to bail out the banks. That is simply untrue,” he said.
