Agency Will Seize Property From Bad Debt Developers

The new National Asset Management Agency (NAMA) announced in the emergency budget on Tuesday will be given the power to seize property which developers are defaulting on, it has emerged.

Under new powers announced by the Government the State will take over €90bn of development land and risky property loans from the banks through the work of the agency.

The loans will be held by agency for a period of up to 15 years in the hope they can be sold at a profit.

Legislation for the new powers is being rushed through the Daíl while NAMA officials negotiate with the main banks.

However, Brian Lenihan has admitted that the move is risky. The Finance minister admitted yesterday that the Government may need to take majority stakes in the banks if the losses on property and developments loans are so large they need additional capital from the State.

This would mean more Government ownership of the banks, and an retardation of freedom in the banking system.

However, in to protect taxpayer's interests, the agency will redirect profits made from the eventual sale of the loans to the state which may be used to service the €54.2bn national debt.

However, if NAMA makes a loss, the Government will apply a levy on banks to recoup the shortfall. But crucially, this will any partly Government owned banks would be paying money to themselves.

Fine Gael's spokesperson for Arts, Sports and Tourism said: "The worst joke of all is the Government's assurance that, if the value of the loans aren't realised, we will recoup the loss through a levy on the banks. This is complete nonsense.

"The Minister doesn't seem to realise, or assumes that we don't, that, by then, the taxpayer will own the banks. By then, we will have recapitalised too often and acquired so many shares we will effectively own them, even if we haven't gone for outright nationalisation."

(DW/BMcC)