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Questionable assumptions form the basis for the valuation policy of the Nama Bill, writes BRIAN LUCEY

THE COLLAPSE of the property bubble, and the likely losses that the banks will take on their lending has been brought home to many through the operations of the Commercial Court. Dealing with the issue of Zoe Developments, figures laid before the court stated that the company, one of the largest and longest established in property, would if wound up be able to pay just over one-third of its bank loans. Zoe is a microcosm of the problems the banks face. In total Zoe owes €1.1 billion, while the total problem loan portfolio of the banks is estimated to be €90 billion. Taking losses of the Zoe scale on the chin would bankrupt the banks. To avoid this we have seen this week draft legislation to establish the National Asset Management Agency to take the worst of these devalued loans off the banks.