Madam, – Regardless of whether the banks remain in private hands or are nationalised, it is clear that they need to be cleaned up if they are to begin operating normally again. In this respect, Nama seems like a plausible strategy to underpin a more stable future for our banks.
However, it is clear that the costs to the taxpayer will be great and that we should aim in the long-run to recoup as much as we can without damaging the banks this money is supposed to assist. Therefore, it seems to me that nationalisation, or a majority shareholding, is a complementary policy to Nama, which will allow us to fairly reap what rewards will arise from our massive investment.
The false dichotomy of nationalisation versus Nama suits our tribal politicians, but prevents each side from seeing the true merit in either proposal. This decision is too important for us and our children to permit squabbling politicians muddy the water.
They should consider each other’s proposals more carefully and try to find a policy which truly represents all the people of Ireland, not just those that happen to sit on the Ceann Comhairle’s left hand side.– Yours, etc,
Madam, – As Nama appears to be the only workable solution for the banking crisis, it is imperative for the Government to align as much as possible the interests of the banks and the taxpayer with its plan for the purchase of the distressed loans. The main sticking point is the valuation of these loans.
The banks and the Government would like the loans to be transferred at a relatively high valuation, such as the 20 per cent to 30 per cent discount originally mooted, to avoid having to recapitalise the banks.
The Government should be supported in going ahead on this basis, or on a somewhat greater discount, but with an agreed claw-back if it is shown over time that it paid too much for the loans. The claw-back would be the difference in the price between what is paid for the loans and what is received for them by Nama, plus the cost of funds over the period. Likewise, the banks should be similarly reimbursed if they are under-paid for the loans.
In return for setting up the Nama vehicle, the Government should receive the option to take a further 25 per cent stake in the participating banks. This, on top of the existing 25 per cent option, would give the Government (ie the taxpayer) a 50 per cent stake in the banks, thus ensuring that the taxpayer’s interests are aligned with those of the banks and its shareholders.
The above proposal would provide clarity for purchase of the loans, which is sorely needed, and ensure that the taxpayer shares in any upside. – Yours, etc,
Madam, – In Phelim Murnion’s letter (August 31st), do I detect the emergence of an “Alan the Plumber” rather than a “Joe the Plumber” into Irish political discourse? – Yours, etc,