Nama will cause 'untold damage' writes Desmond

THE NATIONAL Asset Management Agency (Nama) will cause “untold long-term damage to Ireland Inc”, while nationalising the banks “is a great sound bite – but is equally not a solution”, according to financier Dermot Desmond.

Writing in The Irish Times today, Mr Desmond said that Ireland needs “at least three” actively competing banks, “otherwise good businesses and good projects will be starved of funds with the consequential loss of jobs”.

A lack of liquidity, and not property, was the problem in the Irish financial system, he says.

“Setting up a quango to be Ireland’s primary property lender is a sleight of hand to distract from the real need, which is liquidity,” he writes.

“Given that the problem is liquidity, the emphasis should be putting more money into the financial system, not less – what the economists call quantitative easing.”

Mr Desmond adds that Ireland “must at all costs avoid a comfortable duopoly or, worse still, a group of nationalised banks which quickly become a monopoly”.