Peter Mathews (Dublin South, Independent) | Oireachtas source

I hope it is recorded. Perhaps the Minister would ask his colleagues on the Government benches to examine this and to start the banking inquiry along the lines I have just mentioned, because it could save a great deal of money. Let us save some money for the taxpayer and let us share with the taxpayer the truthful, fair and even-handed opening scene. Let us pull back the curtains and start from there.

The guarantee only occurred when the bubble burst. We all know what happened after that and that the lawyers had us shivering and afraid to do what was right. Instead of that they became neurotic about the law and said that historical law provides that everybody should be protected equally, including the guys who had bought in the secondary market. The bonds were originally offered in the primary market and the investors had the good sense to get out and sell the bonds to the secondary market. That is when the bonds go up and down in price. This morning, representatives of NAMA appeared before the Committee of Public Accounts to explain how they hope to reduce the exposure of the Exchequer, which is us the citizens, by accelerating the disposal of the loan portfolios they hold. They are probably right to do that at present because there is a huge amount of overloaded liquidity in the hands of hedge funds and other investment funds seeking to buy assets at lower yields than they otherwise might. They are there because the cost of holding the bonds that NAMA issued to the banks in return for the rotten loans it acquired is currently low. However, if NAMA holds onto the funding of the bonds and holds onto the assets because somebody thinks they might make a little more, given that it is a floating variable rate, the price of those bonds might rise and that could result in losses. As the yields rise on those bonds, supported by the underlying property assets, the value falls and the underlying assets fall. Perhaps NAMA is right, and I believe it is, to see if it can dispose of larger lumps of those portfolios, simply to reduce the exposure of the State and the people.

I wish the Minister well. He should simplify things wherever he can. He should not add more law. People's heads get wrecked and melt when trying to understand what is happening, so the Minister should simplify. He should recruit people who are competent, experienced and as apolitical as possible to work these things. He should not be afraid of any bad news that might be coming down the track. Instead he should face it, measure it and then deal with. He must keep things open and transparent.

I urge the Minister not to allow any of his colleagues to do what has been done on a few occasions previously. When the NAMA legislation was brought forward in October and November in 2009, it was not on the Minister's watch, but the IBRC liquidation and the promissory note issue were presented misleadingly and dishonestly, in my view. There was a golden opportunity to achieve the cancellation of what are now the promissory bonds, formerly the promissory notes. That could have been done. I am deeply disappointed on behalf of the people who elected me and all the other Members of the House at what happened and that illusory and misleading language presented something other than what it was at the time. That is not right. Honesty is the best policy.

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