Mr. Brendan McDonagh:

The legislation is very clear in section 10. It states that the National Asset Management Agency must get the best achievable price to recover what it paid for the assets, to cover any additional funding we issue in the meantime and to recover any costs we incur in order to bring the State back to a break-even situation.

We must be mindful of the wider considerations. We also had a recent review by the Minister under section 227 of the Act. As part of the review, the interests of the wider system were examined, for example, the creditworthiness of the State, which had a debt-to-GDP ratio of more than 120%, and to get rid of the contingent liabilities of the State of which NAMA formed a significant contingent liability. The Minister asked us as part of the review to take full advantage of the market because there is much demand for Irish assets. Following the successful liquidation of IBRC we could bring forward the timelines for when we could sell the assets to pay off the debt. There are many considerations going on which are much broader than NAMA’s original objective.

The issue in terms of the recommendations of the Comptroller and Auditor General is that we are not an investment fund. We had to overpay for the assets by €6 billion on day one. We had a declining property market that was down by 30% post acquisition. We originally worked to a timeline of 2020 but the Minister’s review suggested trying to conclude early. We said we would try to get 80% done by 2016 and 100% by 2018. The State wants rid of the contingent liability because it helps from the national debt perspective. With all the competing issues we felt at the time, and because the section 227 review was not issued at the time of the Comptroller and Auditor General’s report, that we did not think it was appropriate because we want a long-term investment fund. That said, the whole issue of return is certainly good practice. We totally agree with that. Now that we have the clarity of section 227, it is something we intend to look at and subject to board agreement we will probably put it in place from 2015 onwards.