SOMETIMES it is no harm to go back to basics. As the level of complexity surrounding the National Asset Management Agency continues to mount, it is worth remembering why NAMA was created in the first place.
The reason was simple enough -- to quickly save the banking system in a fair and transparent manner so that the banks could begin lending once again. On this basis, NAMA is already struggling. Most of the smaller banks have either disappeared or are about to be merged into the so-called third force, radically reducing the choices available to individuals and businesses who want to borrow or save.
While some reduction was probably inevitable and even welcome, the sharp decrease in banks is not good news and is unlikely to be reversed anytime soon as there is little incentive for foreign-owned banks to compete against Irish banks which are backed by the state. The government's decision last Friday to accept interest payments in ordinary shares instead of cash on its Bank of Ireland preference shares brings the topic of majority state-ownership of Ireland's banks back into focus.
We have all been softened up by the endless talk about haircuts, loan transfers, and all the other jargon such as the wonderfully named special purpose vehicle -- a strange accounting trick that sprung up last October, which no ordinary mortal could hope to understand.
But none of this can hide the fact that the banks, and all the liabilities which the banks are burdened with, remain a Government problem.
While the Government has constantly made a noose to hang itself by its repeated assertion that state ownership of banks is a complete no-no, most business people now care far more about having a functioning banking system.
Of course, banks should not be lending willy-nilly but I'm inclined to believe Central Bank governor Patrick Honohan, who has suggested that the banks, spoilt by the boom, do not have the expertise to lend to business anymore.
If the views of the banks' main regulator are correct, then the banks are to blame for many of the problems being encountered by businesses which are strapped for cash right now.
They are, in short, part of the problem rather than part of the solution.
But one of NAMA's biggest problems is that it is simply taking too long. We were initially promised that the biggest loans would begin transferring across by December. Then it was mid-February. Then it was late February. Now it's being suggested that delays caused by the (state-owned) Anglo Irish are delaying things still further. A huge bottleneck is also developing as each loan being transferred requires scores of information to back it up. All the banks have had staff working around the clock for months trying to compile this data but it's all hitting NAMA at the same time and obviously proving problematic to process.
Of course, this is on top of the fact that the European Commission has still not signed off on the whole project. NAMA has not been swift, has not pumped money into the economy and has not guaranteed a commercial and vibrant banking sector. Some might say this sort of criticism is premature but this ignores the fact that NAMA has (or is meant to have) a relatively short lifespan of just 10 years.
So the sort of delays we are witnessing represent an important section of NAMA's supposed lifetime. It's worth noting that other governments across the globe are working on exit strategies to withdraw state aid from their banks. We are just beginning to pump the money in.
But more worryingly, we are also witnessing a growing disconnect between what NAMA promises -- a functioning banking system thanks to a bailout that will make money available for the taxpayer -- and the reality of falling property prices, falling share prices, a larger-than-anticipated discount on the loans going to NAMA, shrinking credit for companies and, above all, absolutely no signs of improvement anytime soon.