Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

Professor Ahearne wrote an article about NAMA in July 2008 in which he said the best practice was for banks to recognise the losses of the loans up front and sell the assets at fair market value. Dr. Bacon, who was before the committee this morning, was the architect of NAMA and he said there were €34 billion in impairments on €80 billion of loans, a write-off of between 50% and 60%. When the then Minister for Finance, the late Deputy Brian Lenihan, introduced the legislation in the Dáil, he said NAMA was being put forward on the basis of a discount of 30%, which would have been some €23 billion rather than the €42 million it transpired to be. Did the design of NAMA, and the fact that it was based on a 30% discount rather than a discount of nearly 60%, feed into the need for the banks to be recapitalised? If the eventual level of discount was known at the early stages of setting up NAMA, would the professor have proceeded with setting up the agency?