NAMA in a nutshell ...
THE National Asset Management Agency (NAMA) is the Government's solution to the banking crisis, aimed at cleaning up the banking system by taking toxic property loans off its balance sheets.
The asset management company is buying more than €80bn of loans from five major banks in a bid to manage the bad debts of Irish banks. All property loans with a value over €5m must go into NAMA, except for Irish Nationwide and Anglo Irish for which there is no minimum threshold. NAMA will pay approximately €40bn for the loans, and this will be paid using government bonds -- not cash.
The banks will then take these bonds and place them with the European Central Bank which, in return, will give them cash.
The cash, so the theory holds, will then be used to recapitalise the banks so that they can start lending to business and consumers again.
NAMA will be able to sit on the assets over long periods, trying to sell them when the property market recovers.
The agency is taking ownership of thousands of loans secured on property in Ireland, the UK, Europe and the US.