'NAMA for mortgages' on table at IMF talks
An entirely new NAMA-style agency for mortgages and small business loans looks set to be established as negotiations between government officials and the IMF/EU near their conclusion.
AIB, Bank of Ireland, Irish Nationwide, Anglo Irish and even Irish Life & Permanent will be expected to transfer loans into the new agency, the Irish Independent understands.
The IMF is trying to restructure the country's banking sector by reducing the size of the loans each bank holds and removing bad loans from their balance sheets.
Tracker mortgages, which are loss-making for most banks because they charge the customer an interest rate that is lower than the bank itself is charged to borrow on the international markets, could go into the agency.
However, the difficulty with these loans is they are less attractive to the private sector as the rates on trackers cannot be put up as easily as variable mortgages. Therefore, it may be more difficult to sell them on to private companies later on.
"It's not about picking just one type of loan, it is more about getting non-performing assets out of the system and restoring confidence that way,'' explained a source.
"The IMF's thinking favours an asset segregation agency such as NAMA,'' said another source.
The negotiators are expected to be far more radical than many bankers expect, seeing the talks as the final chance to restore the reputation of the Irish banks and allowing them to tap funding markets once again.
NAMA's rule that only loans worth €20m or more can be transferred to it is likely to be dropped as well.
This will allow all property loans to be transferred to NAMA regardless of their value or size, again helping to shrink the banks.