A revised Bill to establish the National Assets Management Agency has been signed off by Cabinet and will be published in the coming days, it was announced today.
The Dáil is set to debate the Bill next Wednesday.
Minister for Communications Eamon Ryan said that a number of changes had been made to the Bill, including a mechanism that would protect taxpayers by sharing the risk between Nama and the banks, a guarantee that those participating in Nama would lend on a fixed percentage of the loans issued to small and medium enterprises, and the reform of financial institutions.
Directors of financial institutions involved with Nama will have to step down, if they were appointed before 2008 and will be replaced over the course of two years.
Mr Ryan said a windfall tax of 80 per cent will be levied on profits gained from increases in land value due to re-zoning decisions, while the amount Nama can borrow without the approval of the Minister for Finance will be reduced to a limit of €5 billion.
Nama will also be required to report to the Minister every three months.
"Nobody would choose to be in a position in Government where the state must act to clean up and repair the banks. However, this is the position we have found ourselves in. Having examined the options available over the past 6 months, I believe that NAMA is the best option to mend a broken banking system," Mr Ryan said.
"Legislation of such monumental importance to the Irish state requires close scrutiny. The Green Party has been questioning, checking and changing this legislation over the past months."
Meanwhile, the Irish Bank Officials' Association (IBOA), which represents 23,000 staff in the financial sector, today gave its "qualified" approval to the proposed agency. It said the plan offered the best prospects of protecting jobs and stimulating economic activity.
IBOA general secretary Larry Broderick said Nama had the best chance of repairing the banking system of all the solutions put forward so far. It also said complimentary measures must be introduced alongside Nama to ensure it is successful.
These include a system to measure the supply of credit and a more effective regulatory regime. The IBOA said it was important the financial sector not only be repaired but reformed.
It has also called for negotiated settlements rather than the use of compulsory redundancies when firms are forced to reduce staff numbers and wants current pay rates and conditions in the financial services industry to be maintained.
Speaking to reporters today Mr Broderick said it expects around 5,000 job losses in the industry in the coming years and said the crisis will lead to rationalisation in the sector.
The association also wants the introduction of a whistle-blowers' charter underpinned by legislation and a change in the banking culture which will be reflected in governance structures. In addition, it called for protection for homeowners in default and an inquiry into the banking crisis in order to avoid a recurrence of the same mistakes.