canicemcavoy
Registered User
- Messages
- 601
Based on the widely rumoured figures, Ireland Inc intends to provide circa €60 billion of bonds to the banks as part of the Nama exercise. The Government could achieve exactly the same impact by guaranteeing €60 billion of bonds issued by the banks themselves. The Government can then charge a completely transparent fee for the use of this guarantee. This leaves all the risk of the existing loans with the existing capital providers and could be implemented in the morning without new quangos, complicated legislation, or additional risk. It should be noted that Ireland Inc is already showing significant profit on its preference share investment in the two main banks.
He repeatedly says that "the problem is liquidity".
That is not the only problem. Solvency is a big problem as well.
He doesn't seem to understand that the banks must be made solvent. That the uncertainty over the value of their loans must be removed.
His solution would not work because the banks could not lend any money if their capital ratios were not restored. I am surprised that his deputy Michael Walshe allowed him to publish this.
Brendan
Remember, Dermot Desmond has offloaded his bank shares so wouldn't like to see the banks gain from NAMA at the expense of the taxpayer (that said, don't know how much exposure he has to Irish taxation either!).
Not really.
I share his concern at the huge valuation exercize which will cost a fortune and really result in a misleading figure anyway.
Brendan
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