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Honohan says NAMA should have paid less for some assets

Thomas Molloy

CENTRAL BANK governor Patrick Honohan said the National Asset Management Agency should have paid less for some assets which it took over from the banks.

"It would have been great" if NAMA "built in more insulation by providing for even tougher haircuts.

"But at the time it would have seemed an arbitrary and hard to justify exercise of regulatory powers," Governor Honohan said yesterday in a speech to academics in Geneva.

He added that Ireland must provide better information on bank capital and the efforts to help restore investor confidence.

"It is in the interest of all that the perception of risk that currently swirls around Irish assets is dissipated with better information, unquestioned adequacy of bank capital and a fiscal correction," Professor Honohan said.

"Here too the heavy lifting will have to be done largely at home, but optimal engagement of partners remains a crucial element."

The help extended to Ireland by the European Central Bank has "few precedents in history" and Ireland is likely to become "the country case most studied by future generations of students of this crisis," the former Trinity College professor added.

He dismissed recent suggestions that the European Central Bank could just cut off funding as "very wide of the mark".

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