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NAMA architect fears agency's pursuit of debts is "not sufficient"

Peter Bacon, who is credited with coming up with the idea for NAMA, says the agency’s debt pursuits are too narrow-minded.

Peter Bacon fears that NAMA will be happy to recoup merely its own investment in banks - and settle for losses on a loan's original value.
Peter Bacon fears that NAMA will be happy to recoup merely its own investment in banks - and settle for losses on a loan's original value.
Image: Sasko Lazarov/Photocall Ireland

THE ECONOMIST who is credited with ‘inventing’ the National Asset Management Agency has expressed fears that the agency does not have a “sufficient” desire to recoup the full value of its loans.

Peter Bacon told RTÉ’s Prime Time that NAMA’s mission had crept from being one of taking an active social role, to one of merely seeking the return of its original investment on each loan.

NAMA has acquired over 11,500 loans from Irish banks, paying €30.5 billion for loans which had a nominal value of €72.3 billion – but Bacon fears the agency will now be happy to recoup its own €30.5 billion investment, and not the whole value of each loan.

“That certainly is not sufficient, because that capital injection to the banks is part of the cost to the Irish taxpayer,” Bacon said.

“It’s national asset management – it’s asset management, not debt collection – and I think that culture of debt collection risks costing the Irish taxpayer a great deal.”

Bacon said the reason NAMA had come under the aegis of the National Treasury Management Agency was because of the latter agency’s access to capital markets, and because of its own credibility on the international stage.

“That is not being used by NAMA,” Bacon said. “That’s what it was put there for.”

The economist further suggested that the agency could be taking a more active role in trying to offload some of its overseas property assets in order to mitigate the burden on the taxpayer.

Although the Irish property market remained flat, because of the presence of distressed sellers and the short supply of credit to prospective buyers, similar downward pressures were not present overseas.

Bacon also said reports on NAMA’s operating costs, which amount to around €242m a year – or close to €1 million a day – were “missing the point” given the size of the agency’s operations.

Read: TD calls for NAMA to release housing to domestic abuse victims

More: NAMA to recruit Chief Financial Officer as part of reorganisation

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Gavan Reilly

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