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.
3 thoughts on “What NAMA needs”
Interesting name appears on page 128
Thanks for those excellent points!
EU and IMF recommend tax payer safeguards,some you mention, ignored by NAMA, blogged here as well..
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