Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Question 31: To ask the Minister for Finance if he has estimated the staffing requirement and the operating costs likely to be associated with the operation of the National Asset Management Agency; the powers which the interim managing director has; and the oversight and articles of association under which it operates under National Treasury Management Agency legislation. [27919/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

As the Deputy will be aware I have established a steering group to oversee the preparation of the National Asset Management Agency legislation in parallel with the practical preparations for the establishment of NAMA. Among the issues being considered by the steering group is the policy on the staffing of NAMA once established and the degree to which operations will be outsourced to service providers or participating institutions. The legislation will include provisions dealing with the staffing and providing for the operational costs of NAMA. The legislation will be published before the end of this month.

Mr. Brendan McDonagh, a director of the National Treasury Management Agency, was appointed as interim managing director in May of this year. Mr. McDonagh works in partnership with the steering group which contains representatives of the NTMA, my Department and the Office of the Attorney General in ensuring the implementation process is driven forward in the interim period, pending legislation. Mr. McDonagh is an employee of the NTMA and is one of its representatives on the steering group.

Pending legislation, NAMA preparatory work is subject to the same oversight as the NTMA and is being directed by the NAMA steering group, which reports to me. NAMA will be closely aligned with the NTMA and as a consequence NAMA will benefit from the positive international reputation of the NTMA. The precise nature of the relationship between NAMA and the NTMA will be provided for in the legislation and it would not be appropriate for me to comment further on the detail in advance of its publication.

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

I refer to the ongoing discussions with the banks which the Minister has overseen. What commitments or indications have been entered into with the banks in terms of valuation criteria? Have these been the subject of any of the discussions or are they entirely out of bounds until an Oireachtas view is taken?

With regard to the management of the property portfolio which the State will soon own, how is it intended to manage that process? Does the Minister intend to establish a special court - as happened in Sweden - where issues of legal challenge could be quickly dealt with rather than having this process endlessly delayed in visits to High and Supreme Courts during the process?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Discussions with the banks have not related to valuation methodology as that is a matter of policy which ultimately will have to be determined by the Oireachtas. At this stage the valuation discussions are taking place within NAMA and with my officials and in liaison with the European Commission at Brussels. The discussions with the banks relate to the identification of their impaired assets and it is essential that we have a profile of those assets as part of the essential preparatory work for NAMA.

On the suggestion of a special court, I will have it examined. However, the Commercial Court in the High Court works extremely well in Ireland. There are greater difficulties with the operation of judicial review and we certainly do not want NAMA marooned in a labyrinth of legal proceedings so that is an important matter. The Attorney General is represented on the steering group and I know a great deal of attention is being given to this aspect.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

The Minister referred in earlier responses to the principles of valuation and the valuation process. He referred to a firm of advisers, HSBC, in that process. Will the Minister agree that what is needed is a separate and independent valuation board, like the Swedish model, of independently qualified valuation people? In Sweden this included people from the academic sphere.

The same firms of lawyers and accountants seem to be acting for people in all parts of the process. One firm of lawyers acts for the Department of Finance, and is now acting for NAMA, and also acts for one of the covered institutions and was also quoted as an adviser to a consortium interested in buying into one of the banks. Similarly, one of the major accounting firms crops up as everybody's adviser, on all sides of this issue. I worked for an international accounting firm and I understand the concept of Chinese walls but in accounting and legal firms there are senior partners and more junior partners and staff. For example, if the senior partner is operating for a bank, one of the covered institutions, and some of the more junior partners down the pecking line are operating from NAMA, how does the Chines wall concept operate because the senior partners are the senior partners in any professional firm? I ask the Minister to expand on this aspect because it seems extraordinary that the same set of names crops up all the time for practically all the parties concerned. Do we have other firms of lawyers and accountants?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

With regard to the involvement of HSBC and Jones Lang, they are assisting NAMA in devising a valuation methodology while not actually doing the valuations. They are engaged in provisional valuations for the purpose of their general exercise but they are not doing the valuations. I will have Deputy Burton's suggestion of an independent board examined as it is something that will have to be considered in the context of the legislation.

On the question of professional advice and professional advisers, I am glad to say that on this occasion, the NTMA engaged in standard tendering procedures in which I do not have any involvement. On the basis of those procedures it selected those whom it regarded as complying with the tender to the best possible extent in terms of price offered and in terms of the quality of the expertise available.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Is the Minister aware these are all the same firms?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Of course I am aware of matters that are in the public record but I am making the point-----

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

I ask the Minister to allow the other Deputies who are offering.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I apologise to Deputy Morgan.

Arthur Morgan (Louth, Sinn Fein)
Link to this: Individually | In context

Are the Minister's negotiations with the banks regarding the charges of their staff doing that element of the work for the Minister, for NAMA, complete or ongoing? What is the estimated level of cost for the activities of the banks' staff associated with NAMA likely to be?

Kieran O'Donnell (Limerick East, Fine Gael)
Link to this: Individually | In context

I have a similar question about the operating costs for NAMA. The understanding is that NAMA will take over all development loans, both impaired and performing. Is the Minister satisfied that this is the most efficient model, bearing in mind the cost to the taxpayer? The former Swedish Minister for Finance was before the Oireachtas Joint Committee on Finance and the Public Service yesterday. He was of the view that the Government should put money into the banks rather than purchasing assets as in the NAMA model. I ask the Minister to comment.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I met him yesterday afternoon and we will not argue over what he said. It is important to bear in mind that he endorsed the policy of the Government of a blanket guarantee. He said that was the first essential step taken in the Swedish crisis. He said, rightly, that capitalisation is very important and this is a step we have taken with regard to AIB, Bank of Ireland and Anglo Irish Bank. He mentioned nationalisation with regard to ownership structure and we have nationalised Anglo Irish Bank and do not rule out larger stakes in the other banks if the scale of the losses requires it.

On the question of taking distressed assets and asset disposal, it was a technique he mentioned as one of the techniques to resolving a banking crisis. We decided because of the small size of Ireland and the scale of the development loan book that it would be better to take the performing as well as the non-performing loans to give NAMA a continuing income which will help with operating costs. The Deputy mentioned the word, "negotiations". There are no negotiations with the banks. This is a public policy that is being implemented. So far as I am concerned, all that happens with the banks is discussions about how we are going to proceed with that public policy. The banking crisis here is a very serious problem for which the banks share a great part of culpability and it is essential from a public interest point of view that the Government lays down policy in this area to restore the banking sector to rude good health as quickly as possible.