Written answers

Tuesday, 13 October 2009

Department of Finance

National Asset Management Agency

12:00 pm

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
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Question 124: To ask the Minister for Finance his plans, within the National Asset Management Agency legislation, to protect whistleblowers, both within the covered institutions and within NAMA itself; and if he will make a statement on the matter. [35766/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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There are substantial provisions in the NAMA Bill to facilitate the disclosure of information and protect those involved. Section 199 allows for the appropriate disclosure of confidential information, by a person acting in good faith, to law enforcement authorities. Section 200 requires NAMA to inform the enforcement authorities where NAMA suspects that a participating institution may have committed a criminal offence or contravened certain specified laws. The Bill also provides for the publication of Codes of Practice by NAMA within three months of its establishment governing various matters. The codes will include a code on the conduct of officers in NAMA.

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
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Question 125: To ask the Minister for Finance his plans, within the National Asset Management Agency legislation, to ensure that the senior management team of NAMA has global experience, particularly with regard to working on world scale asset recovery and portfolio management; if he will ensure that at least a percentage of the staff have no prior involvement with the Irish financial, State or property sectors and therefore have no vested interests; and if he will make a statement on the matter. [35767/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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NAMA will be a State agency administered by its own board on an arms-length basis. The Bill provides that board members must have experience and expertise in such areas as finance, economics, banking, investment, property management and sale. Section 40 of the NAMA Bill provides that the NTMA will provide staff to NAMA and the Deputy will be aware that the NTMA structure was designed, among other things, to be conducive to the recruitment of high quality experienced staff. The legislation deals with the risk of vested interests in a variety of ways, including by requiring the NTMA to ensure that each person assigned to NAMA provides a statement of his or her interests, assets and liabilities.

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
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Question 126: To ask the Minister for Finance the reason the National Asset Management Agency plans to pay the banks over and above the valuation of loans at €47 billion; the further reason the additional €4.7 billion cannot be given in Government bonds in exchange for equity in the banks; and if he will make a statement on the matter. [35768/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The valuation methodology used to estimate the price paid for the loans takes into account both market conditions and subject to limits, long term economic returns which is consistent with EU guidance. The reflection of long term economic values in the valuation process is necessary to achieve the goal of stabilising the financial system to ensure it is in a position to support economic recovery.

Some institutions will require additional capital in order to absorb the losses arising from the transfer of their impaired assets to NAMA. The Government has indicated its preference that private market solutions are found and implemented but should any State capital investment be required it would be in the form of equity. This approach strikes a balance between reflecting the long term potential of these assets while minimising any potential risk that NAMA will make a loss. Furthermore, the Government has committed to ensuring that should there be eventual loss made by NAMA, it would be recouped in the form of a levy.

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
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Question 127: To ask the Minister for Finance if there are directives from the European Central Bank forbidding the State from using Government bonds to buy equity in the banks under the National Asset Management Agency proposal; and if he will make a statement on the matter. [35769/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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There are no such ECB directives. NAMA is being set up to purchase loan assets from credit institutions and will not be engaged in the acquisition of bank equity.

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