Lenihan brings proposed Nama legislation to Cabinet

THE CABINET met yesterday to discuss proposed legislation for the establishment of the National Asset Management Agency (Nama) and will return to the issue at a further meeting today.

Apart from a number of routine matters, most of the afternoon’s four-hour meeting was devoted to Nama, with Minister for Finance Brian Lenihan bringing his colleagues through the detail of the legislation.

Ministers were described as “working their way through the text”. It remains the Government’s intention to have the draft legislation available on the internet by the end of the week.

Once the Bill has proceeded through Cabinet, it will be finalised by officials. It is then expected to be published on the Department of Finance website, www.finance.gov.ie

The Government is making plans for foreign banks not protected by the State guarantee to participate in the €90 billion “bad bank” scheme.

Many of the developers involved also have loans outside Ireland.

Officials expect that loans to the 50 largest property developers, worth some €30 billion, will be moved into the new agency by December. The price at which they will be acquired has yet to be determined.

Minister for Finance Brian Lenihan said last week that it was not inevitable that the process would result in the State taking a majority stake in the two big banks, AIB and Bank of Ireland. Mr Lenihan said he hoped Nama would not prove a happy hunting ground for lawyers.

Asked about potential disruption by recent court action taken against big developers by ACC Bank, he said the Government was interested in a joined-up approach to repairing the banking system.

Nama will operate under the aegis of the National Treasury Management Agency, whose chief executive Michael Somers said last week he did not see another solution to the banking crisis.

The decision to establish Nama was announced by the Minister in his budget statement of April 7th, “with a view to addressing in a comprehensive way the problem of impaired or potential impaired assets in the banking system”.