# Why is NAMA including good loans?



## Brendan Burgess (25 Apr 2009)

I have not seen this explained and I can't see the reason. 

It makes NAMA much bigger than it needs to be.
This makes it more complex to manage.
It also increases government borrowing.

NAMA will find it hard to get the quality and quantity of staff it needs. 

Customers might not want their loans moved to NAMA. 

The only advantage I can see is that the good loans will be profitable. But if they are transferred at fair value, then they will be of no benefit to NAMA.


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## Spondulicks (22 May 2009)

Brendan,
Could the bankers or the NTMA trading as NAMA tell the difference?
Do you want to tell your debtors that you do not think they will pay - ask any receiver or liquidator what this does to asset valuation.
Fair Value is really what you get in Ballinasloe or at the Puck in Killorglin. 
As regards what will go on between NAMA and the Banks, you might as well draw lots in terms of arriving at a valuations between these parties and in assessing whether the prices are fair or not.

What is a fair price? Is it what Tesco/Dunnes/Walmart pay their suppliers? Is it what Moneylenders charge their borrowers? Is it what pension fund managers charge pension fund trustees or individual pension purchasers?

There are methodologies, there are markets and there are prices. A Fair is where some prices are negotiated but as an adjective, it is misleading to bring it and price together too often without misleading people.

Hope that helps Brendan.

Spondulicks - real money for real people!


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## paddy26 (5 Jun 2009)

I think there are plenty of valid arguments like this that become irrelevant if the banks are temporarily nationalised.  This way NAMA can get on with its business and the govt (as only shareholder) can put pressure on the banks to start lending again to *viable *businesses.  There is no perfect answer but I believe we need to get this resolved as soon as possible.


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## askalot (6 Jun 2009)

Brendan said:


> The only advantage I can see is that the good loans will be profitable. But if they are transferred at fair value, then they will be of no benefit to NAMA.



Absolutely agree with you but I think the government see it as a way of selling the idea to the tax paying public,  i.e. the people who pick if the tab if/when in 15 years time the extent of the shortfall on bad lending becomes apparent. The good loans are the sugar to help the medicine go down.


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## darag (6 Jun 2009)

Spondulicks said:


> Fair Value is really what you get in Ballinasloe or at the Puck in Killorglin.


What a great line.  Would you mind if I used it in meetings/discussions in work?


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## papervalue (6 Jun 2009)

They are making it up as they go along. Are they not just creating a new bank?

Not ranting- But i cant see why tax payer is supporting these banks. They put tax payers money in and small companies can not get small loans/overdrafts of less than €10k

I think that they should have left the bank to their own devices(they diggged their own grave) and nationaliesd any that were on the brink of closure.

To me writing off the loans to golden circle for the share money should not be done- all the lads in golden circle have assets. Do a statement of affairs on each and i sure they would get repaid most of the money(why are these loans not being transferred to nama)


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## Spondulicks (14 Jun 2009)

Darag - you are welcome to use the definition of Fair Value once you credit the source. 
By the time the government is finished bailing out the Galway tent it will need to hire Croke Park or the 15 Acres, such is its largesse. Fianna Flaithiulach probably sums it up.
Is there any truth that the negotiators from the deal with the CORI Religious Orders are being sent in to deal with the banks?


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