GOLDMAN SACHS’ chief European economist has praised the National Asset Management Agency (Nama) as “the latest in a series of impressive steps” by the Irish Government to clean up the banking system.
In an e-mail circulated to the investment banking giant’s clients, the London-based economist Erik F. Nielsen also warmly welcomed Prof Patrick Honohan’s appointment as Central Bank governor.
“In my opinion, the Nama operation is just the latest in a series of impressive steps by the Irish Government to clean up the mess, but it is also a reminder of the huge benefit to a small open economy of being inside the euro zone when shocks of this magnitude occur,” he said.
“I like the Irish!” Mr Nielsen concluded, before going on to discuss “other small peripheral countries”.
Mr Nielsen’s e-mail, sent on Sunday, contains 10 points about financial issues facing different European states. The headline on his first point was: “Further (good) details on the Irish scheme to clean up their banking system.”
He explained the Nama process to clients and repeatedly stressed the Nama process was “clearly helped” by Ireland’s membership of the euro zone.
“The Nama bond will not be traded in the open market, but used directly as payment to the banks for the assets. The banks can (and almost certainly will) in turn repo the bond at the ECB [European Central Bank] to take out the cash,” he said.
Meanwhile, Mr Nielsen said Prof Honohan was “by any yardstick uniquely qualified” to become governor of the Central Bank, and to take a seat at the ECB’s governing council.
“The appointment of an independent academic to the governorship is a welcome break with Irish tradition of handing the job of central bank governor to a civil servant,” he said.
Mr Nielsen went on to outline Prof Honohan’s credentials and experience in glowing terms.
“He has written extensively on the crisis and – according to Finance Minister Lenihan – has advised the Government in private during the last year’s restructuring efforts.”
