Margaret Conlon (Cavan-Monaghan, Fianna Fail)

Before I contribute to the debate on NAMA I take the opportunity as a north east TD to record my sincere congratulations to Deputy Seamus Kirk on his ascension to the role of Ceann Comhairle. It is a superb achievement for him and for the people of County Louth whom he represents where he topped the poll in 2007, and is a fitting highlight to a 27 year Dáil career.

I express my sincere appreciation and thanks to the former Ceann Comhairle, Deputy John O'Donoghue, for his kindness and assistance to me as a new Deputy in this House since 2007.

In all of Deputy Kirk's 27 year Dáil career, and in my two and a half years as a Member, I believe no Bill is as important as the one we are debating. NAMA will buy loans from the participating banks at a discount. That is hugely important. It will take riskier loan classes away from the balance sheets of the banks concerned and make the banks safer and more secure for depositors and investors. We need that to happen to get liquidity back into the system. Like other Deputies in this House, I have had numerous business people in Cavan and Monaghan contact me to outline the way they have struggled to get credit, and NAMA is the vital part in the equation. Banks are hampered in their efforts to lend money to viable businesses, sole traders, potential home owners etc. because of those bad loans. I agree with Deputy Michael McGrath who said earlier that they just do not have the money to lend.

There is and has been a problem with regulation. When money was flush, there were banks that lent money as if it was confetti at a wedding and now we are in this difficult position. It is unfortunate that some bank employees have been treated in an inappropriate manner in the delivery of their services and duties. There are many fine people of the highest integrity working in our banks, and we should not forget that.

There have been many complaints about the long-term economic valuation. It must be remembered that this valuation methodology, along with all other State aid aspects of the NAMA initiative, is subject to the approval of the European Union Commission. Banks need access to cash or near cash assets in place of the property loan assets they had previously, which were not moving in the property market. That is the case not only in my constituency but nationwide. This will make for more stable and secure financial institutions which will be better able to lend to and support the domestic economy. That is the crux of the entire debate on NAMA and the reason I support it.

Every economy needs a proper functioning banking system, and that is what we are attempting to achieve. Who wants to go to an ATM and insert their card only to read that there are insufficient funds on the part of the bank, not the card holder? For us, standing still is not an option. We must take the brave decisions. NAMA will manage the loans either directly or indirectly so as to obtain the best achievable return from them. In the meantime, it will collect interest due and pursue debts to ensure its own income stream and recoup the Government investment over time.

NAMA, in effect, puts itself in the place of the bank that originated the loan and will have all the same rights to pursue debts where necessary. Borrowers who continue to meet their contractual obligations have no reason to worry - their rights are fully protected. We do not want to create another administrative monster and therefore NAMA will be a streamlined, efficient organisational structure. It will have complete control of the assets and will make all the major decisions in regard to them.

The Minister noted that it is clear that an intervention of this scale in the banking market is bound to have considerable implications, both for the institutions individually and for the broader structure of the banking system. The Minister said these implications are being considered and may, as indicated earlier, include implications for capital requirements. These matters have formed part of the broader context in which the NAMA legislation has been discussed.

These weeks of debate on NAMA have given market participants, public representatives and the public themselves an opportunity to digest the detailed and comprehensive nature and content of the Bill and they allow me, as a Deputy from Cavan-Monaghan, to speak on this most important Bill.

For the sake of clarity I wish to point out the principal features of the Bill. NAMA will buy the appropriate assets of the participating institutions. The price will not be the book value of the loans but will include an appropriate write down which the participating institutions will have to reflect in their books. NAMA will purchase the assets through the issue to the banks of Government securities and-or guaranteed securities issued by NAMA. The replacing of property related loans with Government bonds will strengthen the balance sheets of the banks which will increase their capacity to access liquidity in the financial markets and, if necessary, through the Eurosystem liquidity operations.

The principles of the valuation methodology are set out in the legislation, and the Minister will be making detailed regulations based on these principles. The methodology will recognise that the current market for property backed loans and the underlying assets are very illiquid and will not require the banks to accept "fire-sale" values, nor will it be guided in its pricing by the property prices and expectations regarding property prices that underpinned the original lending decision. It will aim to set a reasonable price having regard to a longer term perspective on the property market. The valuation methodology and the scheme as a whole will require EU state aid approval.

NAMA will set the price it is prepared to pay for assets, not the banks, the builders or the vested interests. That will be done for the good of the Irish taxpayer. In acquiring loans, NAMA will have all necessary powers to carry out full due diligence and acquire all necessary information. Participating institutions are obliged to act in good faith and comply with appropriate directions from NAMA.

NAMA will have all the powers necessary to purchase, hold and dispose of assets and, if necessary, complete developments with a view to achieving an optimum return to the State.

NAMA will be accountable to the Oireachtas in the usual manner. The agency will report to the Minister, reports will be laid before the Houses of the Oireachtas and NAMA accounts will be subject to audit by the Comptroller and Auditor General.

Various legislative exemptions and variances have been provided to enable NAMA complete its work as efficiently as possible. To deal with the danger that persons might seek to impede NAMA's operation in particular ways, NAMA has been provided with limited powers to obtain property or interest compulsorily. Where litigation arises in respect of NAMA's operations, provisions have been made to ensure this does not unduly obstruct NAMA's efficient operations and such litigation proceeds without delay. NAMA will be provided with powers necessary to enforce the security on loans, including the appointment of statutory receivers, and to be vested with ownership of the underlying asset where appropriate.

Institutions may apply to the Minister to be designated as participating institutions. The draft text includes objective and non-discriminatory criteria which must be taken account of for designation and these include systemic importance to the State, other State supports available to the institution, maintenance of financial stability and facilitating the flow of credit to the economy. In volunteering for participation, an institution will be required to confirm that it will accept the designation of eligible assets by NAMA and will accept the NAMA valuation of those assets.

Eligible assets for transfer to NAMA will include the land and development books and associated loans. Associated loans will be those loans which are not in the land and development category but which are held by individuals or companies that also have land and development exposures or where the borrower may be a systemic risk to the financial system. Associated loans will take account of cross-collateralisation and other associated loan exposures of borrowers.

I want to mention the anger felt by members of the public for the bankers who have erred. This anger is justified and it is important we allow the investigations to continue. There will be a day of reckoning when a banker or bankers will face the full rigours of the law. At that stage natural justice will be seen to be done as certain individuals have damaged our reputation as a country and for that they must pay the price.

This Bill is necessary. We would prefer not to be where we are but this Government would be abdicating its duties if it did not seek to take the necessary tough decisions for the good of this country. We are not bailing out bankers or developers. We are bailing out nothing except this economy. We must get it moving again and NAMA is the best and only show in town.

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