What NAMA needs

Constantin also has a good list of things that need to be added to the legislation, to make it more accountable to the taxpayer:

1) Provisions for taxpayer protection and provision for a taxpayers’ oversight board filled with only independent observers, who are not in the employment of NAMA, NTMA, the State or any other party to NAMA undertaking;

2) Complete and comprehensive balance sheet and cost/benefit analysis of the undertaking;

3) Exact upper and lower limits for banks equity the taxpayers will receive in return for NAMA funds and post-NAMA recapitalization funding;

4) The exact procedures for divesting out of the banks shares in 3-5-7 years time with exact legal commitment by the state to disburse any and all surplus funds (over and above the costs) directly to the taxpayers in a form of either banks shares or cash;

5) The formula for imposing a serious haircut (60%+) on banks bond holders, possibly with some sort of a debt for equity swap and a restriction that NAMA cannot purchase any rolled up interest acrued since the latest ‘restructuring’ of a loan;

6) A recourse to all developers’ own assets – applied retroactively to July 2008 when the first noises of a rescue plan started;

7) The list of qualifications for any bank to participate in NAMA, including, but not limited to, the caps on executive compensation at the banks and the requirement to set up a truly independent, veto-wielding risk assessment committee at each bank with a mandatory requirement for a position of a taxpayers’ representative on the board that cannot be occupied by a civil servant or anyone who has worked in the industry in the last 10 years;

8) A requirement that risk and credit committees of NAMA include at least 51% majority of independent experts who cannot be employees of the state, NAMA or any toher parties to this undertaking;

9) A condition that the banks must undergo loan book evaluation prior to transfer of any loans to NAMA, the results of which will be made public – on the web – instantaneously – and will impose a requirement on the banks to write down their assets, again before NAMA purchases any of them, by the requisite amounts to balance their own books in line with valuations;

10) A condition that any loan purchased by NAMA be placed on the open market for the period of 2 weeks and that NAMA will not pay any amount in excess of the bids received (if any), with a prohibition for the participating banks to bid on these loans;

11) A condition that every NAMA loan should be publicly disclosed, including its valuations and bids it receives in the auction stage of the process;

12) A stipulation that all and any regulatory authorities (and their senior level employees) that were involved in regulating the banking and housing sector in this country take a mandatory pension cut of 50% and return any and all lump sum funds they collected upon their retirement;

13) A provision for dealing with the speculatively zoned land to be acquired by NAMA, i.e orderly de-zoning of this land and transfer of this land to either public (if no bidders arise) or private use consistent with sustainable agricultural development, environmental improvements, public use or forestry;

14) The measures to prevent banks from beefing up their profit margins through squeezing their preforming customers;

15) The measures to force the banks to reduce their cost bases by laying off surplus workers;

16) The measures for accounting (in a transparent and fully publicly accessible fashion) on a quarterly basis for NAMA operations and the performance of the state-supported banks.