IMF backs the creation and role of NAMA
Published 09/02/2010 | 05:00
The International Monetary Fund (IMF) has reaffirmed its backing of the National Asset Management Agency (NAMA), the body designed to purge the banks of billions in toxic developer loans.
Despite reservations raised last April by one of its officials that the establishment of NAMA would not result in increased bank lending to the economy, the Washington-based body told the Irish Independent that it continued to support the agency.
"The fund has always been supportive of the creation and implementation of NAMA and the authorities' efforts to press ahead with supportive regulatory and supervisory measures to help manage the current stress and lower the risk of future crisis," a spokesperson for the IMF said yesterday.
Minutes of a meeting held in April of last year, released through a Freedom of Information request, show that IMF's Steven Seelig, an official who will join the board of NAMA in May, stated: "IMF (Mr Seelig) do not believe that NAMA will result in significant increase in bank lending in Ireland."
The Government, which is buying bad loans from the banks with state bonds, has long-said that one of NAMA's purposes was to get banks lending to businesses.
However, bodies like the Small Firms Association and the Irish Small and Medium Enterprises Association have said that despite NAMA the banks were not lending to the SME sector.
Yesterday, Taoiseach Brian Cowen played down the IMF comments, which he said were made nearly a year ago.
"This morning there was some talk about what happened 10 months ago at a meeting," he said.
"The fact of the matter is people should contemplate what level of credit accessibility we would have in this economy without NAMA."
Last June, following a report on Ireland by the IMF, the body's mission chief to Ireland, Ashoka Mody, stated that the Government responded to the economic crisis in the "right manner".