Since the announcement in the Supplementary Budget 2009 that NAMA was to be established, the CIF formed a sub-committee which has engaged with Government.
Below is an article from the CIF website.
National Asset Management Agency (NAMA)
The key message from the industry to Government is that:-
- Borrowers are not getting any reductions or write downs of the loans that are to be transferred from the banks to NAMA. Borrowers will continue to owe the entire amount borrowed from the bank to NAMA. NAMA is not in any way a bail out for developers/borrowers.
- Ireland as a country needs an immediate solution to our banking crisis so that a functioning economy can be restored.
- Government solution to the banking crisis must be capable of facilitating a working construction and property industry so that it can play its part in supporting economic recovery by providing competitive and modern buildings in sectors like offices, industrial, retail, housing and other niche areas. Without a working construction and property industry, economic progress will be slower than it should be.
- NAMA tough powers such as those in the draft legislation must be used sparingly and only in extreme cases – if they are used widely they will stifle borrowers’ motivation to successfully work out projects so that potential bank losses are minimised.
Since the announcement in the Supplementary Budget 2009 that the National Asset Management Agency (NAMA) was to be established, the CIF formed a sub-committee which has engaged with Government and the NTMA in relation to the scope and operation of the proposed Agency.
Regional Briefing Sessions have been held countrywide for members in relation to the proposed legislation and how it may impact upon their businesses.
The Federation engaged independent U.K. based Economic Consultants, Lombard Street Research to analyse the current economic and financial crisis facing the country and to outline its recommendations in relation to the proposed NAMA. Solicitors and Senior Counsel were also engaged to examine key issues. Both the Lombard Street Research Report and legal reports were submitted to NAMA for attention.
While it is acknowledged that an immediate and urgent solution is required to restore the banking system, the draft legislation gives NAMA extreme powers that could ultimately be counter productive in that it may be a potential discouragement to effort from borrowers. This has potential to result in NAMA objectives being much more difficult to achieve.
While the authors of the draft legislation may feel that the additional extreme powers are required in situations where ‘debtors’ are non-cooperative with NAMA, the current draft provisions should be modified so as to protect those debtors who work with NAMA on a co-operative basis.
The requirement for interim measures to address the current vacuum being created between NAMA announcement and transfer of loans to NAMA must also be addressed.
A detailed submission has now been made to NAMA, the Minister for Finance and the Taoiseach’s Department.
The Federation has also written to the Minister for Finance and NAMA in relation to the current banking difficulties and lack of credit availability for the development and construction sector.
Government’s programme is that the NAMA Bill will be published on 16th September and the legislation may be adopted on 5th/6th October 2009.
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