The Government's National Asset Management Agency (Nama) Bill has drawn a muted reaction following the publication of the draft legislation today.
The Bill contains amendments to a draft version issued over the summer including a risk-sharing mechanism to ensure the banks share in the risks involved in the €90 billion scheme.
Nama has been designed to relieve the banking sector of up to €90 billion worth of property loans, many of which are under-performing, in an attempt to clean up the balance sheets of Irish banks so they can increase their lending businesses and individuals.
Analysts noted the changes introduced in the Bill but said they were more political and made little difference to investors. "The issue is more a greater certainty of Nama going ahead rather than a good deal or bad deal for shareholders from these amendments," said Stephen Lyons, analyst with Davy Stockbrokers.
"If you look at a lot of the attributes of the amendments/agreements, there are some populist measures . . . such details don't change the investment case for the banks, but they certainly help appease the junior coalition partners."
Labour spokeswoman on finance Joan Burton said the Bill failed to contain "a single material change" in terms of valuation of property and the Ministerial powers to transfer assets at the "long-term economic value" rather than at market price.
"Fianna Fáil remains determined to empower Nama to overpay for toxic bank loans. If they continue on this course, with the hapless Greens in tow, the burden on this generation of citizens and the next could be enormous," she said.
She said despite Mr Lenihan requesting input from the Opposition and public comment and debate on Nama in the six weeks since the draft legislation was published, "it is clear that little or none of this advice has been taken on board".
Ms Burton said the Greens "have been sold a pup to placate their grassroots members" with the proposal to include an 80 per cent windfall tax on rezoned land in a later incarnation of the Bill. She again repeated Labour's stance that an alternative to Nama would be the temporary nationalisation of two main banks.
Chambers Ireland said although other methods of solving the State's financial issues may have merit, there was no longer the time to debate them. Ian Talbot, chief executive, said that recent improvements in spreads on Government debt in the international credit default swaps market "indicates market acceptance of the direction proposed".
He called for all appointments made under this legislation to conform to standard Government tendering procedures to ensure transparency.
Ibec today gave a conditional welcome to the Bill. The business lobby group said it welcomed changes to the legislation designed to ensure greater protection for taxpayers and stressed Nama will only succeed if it results in increased lending to viable businesses.
Ibec director general Danny McCoy said: "It is in everyone's interest that we move quickly to repair our banking system and restore the flow of credit throughout the economy. Unless this happens the economy will stagnate and there will be no recovery."
However, the independent think-tank TASC said the Government had failed to include "strong guarantees of transparency" in the amended legislation and called for Nama to be brought under the Freedom of Information (FoI) Act.
TASC policy analyst Dr Nat O’Connor said: “Even though FOI provisions have been weakened since the legislation was first introduced, including Nama within the scope of FOI would allow the public to access the background material which will inform Nama's decision making. It would also demonstrate Government’s commitment to making the operations of Nama transparent."
Focus Ireland said it was "highly disappointed" the revised Nama legislation "still fails to achieve social dividend".
The housing charity's director of advocacy, Mike Allen, said: "Focus Ireland has previously called for Nama to be given the power to undertake a 'land and housing management strategy' to ensure that residential property or land that becomes the legal property of Nama could be put to social use to meet the growing housing need and the problem of homelessness in Ireland."
Mr Allen said the draft legislation "makes not a single mention" of the word 'social'" and "gives no role to local authorities, "which are meant to be the lead agency in planning homes and communities".
Social Justice Ireland welcomed the plans to introduce a windfall tax on profits gained from the increase in land value due to rezonrezoning decisions.
"Had such a tax been in place it would have prevented a great deal of the speculation that has led to Ireland's present economic state. Its introduction now is welcome as it would ensure that land speculation was not rewarded in the future," said director Fr Séan Healy.
"The vast profits made by property speculators on the rezoning of land by local authorities raise very serious questions.
"As rezonings are made by elected representatives in the interest of society generally, it seems appropriate that a sizeable proportion of the windfall gains they generate should be made available to local authorities and used to address the ongoing housing problems they face."
More detail on the risk-sharing mechanisms in Nama will be outlined by the Minister in the Dáil next Wednesday when the debate on the proposed legislation begins.