Eamon Ryan (Dublin South, Green Party)

There is a difficulty with this in that even if the State defaulted on senior debt bondholders, it would have to go back to them the next day seeking money for the banking system or Exchequer borrowing and that could be more difficult to secure. One cannot be certain but the Government has to take that risk into account. It is easy on a hypothetical basis to say we should try this idea, but the Government has to take that risk on behalf of the people and there is also the potential risk of having to pay higher rates of interest. Approximately 70% of bonds will mature before the expiration of the State guarantee next September. If we take the default option, there is a risk of a flight of money out of our banks and we will be back to September 2008 again facing the difficulty of keeping money in our system to sustain lending. This would not be done for the sake of the banking system. If banks do not have money, they cannot open on Monday morning and cater for the housewife who wants to draw down money for her family or for the farmer who might want to buy seed. This money would not be for the banks but to keep the system going.

When one considers the various options, NAMA is complex but a number of its features stand to it. First, it will be low cost. The NTMA officials wondered last February whether the State could obtain ECB funding at a low rate because it would be hugely beneficial.

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