AGENCY CRITICISED:THE FORMER chief executive of the Government's debt management agency, Michael Somers, has criticised the National Asset Management Agency (Nama) over allegations it was misled by the banks.
Dr Somers, now a Government-appointed director of Allied Irish Banks, said claims made at the Public Accounts Committee last week that the banks misled the agency about the value of their property loans were “outrageous”.
If Nama had evidence of this, they should provide it or withdraw the claims and not hide behind parliamentary privilege, he said.
“They should name the banks and the individuals, and face the consequences,” he said.
Dr Somers, who ran the National Treasury Management Agency until last year on a salary of approximately €1 million, helped the Government set up Nama under the aegis of the debt management agency. However, he said he was never a supporter of the decision to remove toxic loans from the banks through Nama, which buys the loans at a heavy discount, crystallising the large losses at the banks. It did not make sense to force heavy losses on the banks, wiping out shareholders’ investments but not the banks’ bondholders, when there was no money in the property market, he said.
“There is no absolute price level for property or anything because there is no money in the system. If there is no money, the price just falls,” he told The Irish Times.
“Nama has collapsed the value of the market. They have wiped out the banks’ balance sheets and they have done enormous damage to the value of people’s homes.”
Dr Somers said the Government should not have guaranteed bondholders in September 2008 and that Nama “compounded” the problems at the banks last year.
He criticised the Government for not immediately publishing the four-year budgetary changes to address the country’s debt crisis.
Frank Daly, chairman of Nama, told the accounts committee that loan details provided by the banks “certainly were misleading”.
Nama chief executive Brendan McDonagh told the committee he did not disagree with a suggestion that the Garda or the Director of Corporate Enforcement should investigate the issue.
A spokesman for Nama rejected Dr Somers’s criticisms, saying it could not ignore the reality of what it finds after its detailed examination of the banks’ loans.
Anglo chairman Alan Dukes last week called on Nama to set the record straight.
