Results 5,801-5,820 of 16,537 for speaker:Brian Lenihan Jnr

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Throughout the last year, Ireland's membership of the EU, particularly the eurozone, has played a vital role in our response to the current financial crisis. When we vote in the referendum on the Lisbon treaty on 2 October next, I hope no one forgets that the European Central Bank stood behind this country during its time of greatest need.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: It is important to remember that the Government's support for our banks has not been unconditional. Financial benefits have accrued to the State from the fees related to the guarantee, which will amount to €1 billion. The State also holds warrants for a 25% shareholding in AIB and Bank of Ireland, which have gained significant value since the investment. Operational restrictions have...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: -----Bank of Ireland, €16 billion; EBS, €1 billion; and Irish Nationwide Building Society, €8 billion.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Further details of the loan books of the institutions are contained in the supplementary documentation. It is projected that 36% of the assets will be land, 28% development property and 36% in associated commercial loans. The estimate is that 40% of these loans are cash flow producing. The cash flow produced will be sufficient to cover interest payments on the NAMA bonds and operating...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: The valuation formula has regard to EU guidance taking into account both current market conditions and long-term economic returns. This strikes a balance between reflecting the long-term potential of these assets while minimising any potential risk that NAMA will make a loss. The legislation sets out a comprehensive methodology on how assets will be valued and I am publishing today draft...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Deputies should consult the accompanying documentation to see how this figure was calculated. This is an estimate based on certain assumptions and information about the property market including a fall in average property values in the State of about 50% since the peak in 2007.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: This average masks a very large degree of variation in property value movements depending on factors such as location, the nature of the property and so forth. The fall in property values has pushed up property yields. Yields are now above their long-term average and this suggests that values are bottoming out. In fact, the gap between yields and interest rates is much higher than at any...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Using the adjustment factors set out in the legislation, the current estimate of the allowance for long-term economic value is €7 billion. I know there are reasons to argue whether any allowance should be made for long-term economic value but we are here to help the economy and people by putting our financial system back on track.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: We cannot do that by forcing banks to sell assets at below what would be rational prices for them.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: As US Federal Reserve Chairman Ben Bernanke has said, "Banks will have a basis for valuing those assets and will not have to use fire sale prices. Their capital will not be unreasonably marked down".

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: We also reject the idea of forcing distressed asset prices on the banks and we must ourselves find the right balance. We will not pay too much for these assets-----

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: -----but paying too little has its own consequences for the economy and this is not the time to expand our risks. This limited allowance for long-term economic value will be de-risked. The Bill provides for part of the consideration for the assets transferred to be in the form of subordinated bonds, which puts the bank at risk if NAMA were to lose money - which is not our expectation -...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Those who argue that I am transferring value to shareholders must agree that this is very much reduced by the fact that the State is in itself a shareholder for a substantial part of the system. The proportion of the total consideration, which will be in the form of subordinated debt and therefore at risk to the bank and linked to the performance of NAMA, will be approximately 5%. Let me...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: Taking the subordinated debt into account, it is estimated that NAMA will have to achieve less than a 10% uplift over the current market values on its assets over ten years to break even. Let us put that figure in perspective; assuming that NAMA were to dispose of the majority of its assets in the second half of the decade, this uplift in property values would be achieved even if values kept...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: A risk-sharing element has been included. The amount a borrower owes will not change because of the transfer of a loan to NAMA. The agency will have a statutory duty to maximise the taxpayers' return and will therefore be expected to use all of its means to this end. The Bill provides the agency with a wide range of powers it needs to pursue borrowers and enforce security. In some cases...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: The Central Bank of Ireland is taking its position at the centre of financial supervision and financial stability oversight. Professor Patrick Honohan will succeed Mr. John Hurley as Governor later this month. I thank both of them for their assistance. A new head of financial supervision will be recruited shortly. New resources and additional expert staff will widen skill sets and expand...

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: The capital would require-----

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: The capital would require to be provided and have to be borrowed on world markets at current rates of 4%, far in excess of the 1.5% with which this paper can be traded in world markets.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: This capital would have to be provided, and because the banks would be so weakened the only possible provider would be the State. Some of this, clearly, would be offset by the effect of our ownership in the institutions concerned, but this money would have to be provided now, with any payback coming later.

National Asset Management Agency Bill 2009: Second Stage (16 Sep 2009)

Brian Lenihan Jnr: More expensive still is the Labour Party's reported proposal for blanket nationalisation and a straightforward 50% discount on the loans.