Joan Burton (Dublin West, Labour)
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Question 124: To ask the Minister for Finance the financial impact of changing the valuation date for future tranches of National Asset Management Agency loan transfers from 30 November 2008 to 30 June 2010; if a legislative amendment will be required to change the valuation date; and if he will make a statement on the matter. [27812/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Section 73 of the NAMA Act provides that NAMA may set a date by reference to which the market value of a bank asset or property is to be determined. The NAMA Board has set this date as 30 November 2009. It follows that any property price changes after 30 November 2009 will not be reflected in the NAMA market valuations. Commercial property price indices suggest that prices in Ireland may have experienced a small decline since November 2009 but prices in the UK, which has about one-third of the assets underlying the NAMA loan portfolio, rose by a greater percentage. The overall impact, on a weighted average basis, is estimated to be broadly neutral.

The valuation date was set in advance of the voluntary application by the banks to be designated as participating institutions. Any change made now to the initial valuation date would create inconsistency between the valuation placed on assets already transferred as part of the first tranche and those transferred in subsequent tranches. It must be remembered that the European Commission on 26 February 2010 approved the approach taken in establishing NAMA and the valuation methodology adopted. A change to the valuation methodology would necessitate a new notification to the Commission, and a new decision by the Commission on whether or not to approve it. This would cause unnecessary and undesirable delay, and result in little or no gain. What is most important now is that NAMA completes the transfer of the eligible bank assets and meets the demanding deadlines it has been set.