Emmet Stagg (Kildare North, Labour)
Link to this: Individually | In context

Question 119: To ask the Minister for Finance his views on whether resolving the pricing problem is the key variable in determining the final cost to the taxpayer of the bank rescue plan; his further views on the establishment of an independent valuation board to oversee the pricing of assets transferred to the national asset management agency, similar to the Swedish model in the early 1990s; and if he will make a statement on the matter. [18972/09]

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

The objective of NAMA is to strengthen the banks' balance sheets which will considerably reduce uncertainty over bad debts and as a consequence ensure the flow of credit on a commercial basis to the real economy, to protect and grow employment while protecting the interest of taxpayers. As I announced in early April, the potential book value of loans that will be transferred to NAMA is in the region of €80 billion to €90 billion, although the amount paid by the Agency will be considerably less than this.

Pending the establishment of NAMA on a statutory basis an interim managing director has been appointed and I will announce an Advisory Committee in the coming days. The establishment of NAMA and interim preparations will also be overseen by the NAMA Steering Group recently established by me and including representatives of my Department, the NTMA and the Office of the Attorney General.

The valuation of the loans, as suggested by the Deputy, will be a very important variable. Preparatory work for the establishment of NAMA which has commenced will include an extensive due diligence on the loans books of the banks to ensure that the appropriate categories or portfolios of loans are transferred to NAMA and that the banks are cleared of their identified riskiest loan portfolios. Loans will be transferred from the banks to NAMA at an appropriate written down value. The development of a valuation methodology by the interim NAMA will take account of the advice of the Advisory Committee and will be consistent with European Commission guidance and subject to EU State aid approval. This will take into account the risk being transferred to the State and an appropriate adjustment for the value of the State support being provided.

The Government has received expert financial, economic, legal and valuation advice at every step of its measured response to the turbulence in the banking sector. Likewise, specialist expertise, including valuation expertise, will be procured by the NTMA to ensure that the work to be done by NAMA when it is established is accomplished in the most efficient manner so as to safeguard taxpayers' interests.

Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 120: To ask the Minister for Finance when he expects to appoint a permanent chief executive of the national asset management agency; when he expects to appoint a chairman of the national asset management agency; if he proposes that the relevant Dáil committees will have an opportunity to conduct a vetting process of his appointees to NAMA; if he will disclose the remuneration packages in respect of these posts; if the mandates of these office holders are time limited; the organisational and reporting structure of and within NAMA; and if he will make a statement on the matter. [18982/09]

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

The National Asset Management Agency (NAMA) will be established on a statutory basis, under the aegis of the National Treasury Management Agency (NTMA). NAMA will be an independent commercial entity run on an arms-length basis. It will be staffed by professionals whose objectives will be to maximise returns. Like any commercial entity it will want loan agreements honoured in full and will take all necessary steps to extract value from its acquired loan book.

I intend to introduce the necessary legislation before the summer. Matters such as the appointments and terms and conditions of the board, the chairperson and the managing director as well as governance issues and staff recruitment will be addressed in the legislation. Preparatory work by my Department, the Office of the Attorney General, the NTMA and our legal and financial advisers for the establishment and operation of NAMA on a statutory basis is under way. As is the case with all legislation, the Dáil will have the opportunity to debate the Bill when it is brought before the House.

I recently announced the appointment of Mr. Brendan McDonagh as interim Managing Director of NAMA.. By appointing an interim Managing Director, the Government is ensuring the implementation process will be driven forward in the interim period pending legislation. Mr McDonagh will be assisted by a high level advisory committee that I expect to name shortly. I have also directed the NTMA to provide the necessary staffing and other facilities through its existing resourcing arrangements to support the interim operation of NAMA, pending its establishment on a statutory basis.