Feeding the vultures


Sir, – Diarmaid Ferriter makes many points with which I would agree (“Vultures will come back to bite Government”, Opinion & Analysis, January 13th). In particular his dismissal of the argument that the vulture funds were “risk-takers” that needed to be incentivised for investing other people’s money borrowed at low interest rates.

Where we disagree is his suggestion that Sareb, the bad bank set up by the Spanish government, has behaved in the same way as Nama.

The records show that in 2016, Sareb held 780 meetings with international investors. It was as obvious to me as anyone else who has lived here for a long time what was going on. While Spain didn’t not want to be seen as a place closed to international capital, national pride would not allow a great sell-off to occur.

Time will tell whether the Irish government’s vulture-friendly approach was better than Spain’s version of extend and pretend. Yes, Sareb has recently done some vulture deals but the pickings have been much lighter than in Ireland. In both countries, the extension of easy credit has resulted in a considerable cost to taxpayers. Last September, the Bank of Spain said €26 billion of 2012 banking bailout will never be recovered.

The situation has played out very much as predicted by a colleague. Early on in the crisis, he said to me that Spain found the idea of private equity flying around the world swooping on distressed assets to be vulgar. Spain would resist, he said, adding “we have our own vultures here, and once when they are back on their feet, they will be the ones allowed to feed.” – Yours, etc,


Executive Director,

IE Business School,