Sunday 22 April 2018

Founder takes swipe at NAMA

Donal O'Donovan

Donal O'Donovan

Report saying bad bank 'doomed to lose money' financed by Treasury

THE public relations battle between NAMA and one of its biggest debtors Treasury Holdings took a dramatic twist yesterday with a high-profile intervention by Peter Bacon, the economist who first proposed setting up the agency.

Criticism of NAMA by Mr Bacon was last night backed by government backbencher Eoghan Murphy.

Yesterday, Mr Bacon said he now believes NAMA is "doomed" to make a loss for taxpayers. He was speaking at the launch of his latest economic report -- which was financed by Treasury Holdings.

Mr Bacon wrote the 2009 report that prompted the then government to set up NAMA.

The financing of his latest report has raised eyebrows because Treasury Holdings is locked in series of legal disputes with NAMA over seized assets and debts of €1.7bn.

That dispute has been played out in the courts and media over the past six months and is set to run and run.

Last night Mr Bacon said Treasury Holdings did not influence the report's findings.

Even so, it carries a "health warning", Mr Bacon said, with Treasury's involvement well flagged. "What is in the report is no different to what I have said about NAMA over the past 12 months," he told the Irish Independent.

Last night Fine Gael's Mr Murphy intervened in the dispute to back Mr Bacon.

"When the architect of NAMA says that it is time to change course then he must be listened to. Nama is simply too important to the economy for such warnings not to be heeded.

"The fact that the report is commissioned by Treasury Holding is not material," the Dublin TD said.

He said the Government should consider some of the new Bacon proposals including a possible sale of part of NAMA to the private sector.

The full report launched yesterday is a wide-ranging review of conditions in Ireland, focused on kick-starting the economy.

However, the focus of most media was on the findings in relation to NAMA.

On that score Mr Bacon said the agency looks "doomed" to lose some of the €32bn it paid to buy troubled loans from banks.


"Too many assets are being sold too quickly," Mr Bacon told reporters yesterday.

Assets in strong markets including the UK are being sold instead of held long term, he noted, because of pressure from the EU/IMF for NAMA to realise cash quickly.

It means the agency cannot maximise the value of its assets, he said.

Mr Bacon said his criticism of NAMA has more to do with the agency's terms of reference than with how staff there are going about their business.

A spokesman for NAMA said the agency would not comment on the report, other than to note that it was commissioned by Treasury Holdings.

Irish Independent

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