Professor Alan Ahearne:

One had to come up with some sort of number. NAMA followed EU regulations. It presented a formula for calculating things, and an allowance of 8% was given for long-term economic value. If one looks at what property prices have done over the past 12 months, that allowance looks modest. Let us remember that the formula, although it looked complicated, came from the European Commission. I can understand why the European Commission would want every country to follow the same formula. The formula is still just an estimate, and that is all. One is trying to value a piece of land in Leitrim, for example, but there are no sales going on. How can one possibly value land with accuracy in that case? The best one can do is talk about a range or margin of error. I think what NAMA did, in terms of pricing, is that it got the price approximately right. It is better to get things approximately right than precisely wrong.