Just a short note to highlight Morgan Kelly’s excellent article on NAMA in the Irish Times today. He proffers a good solution too –
All that needs to be done is for ownership of Irish banks to be transferred to their bondholders. This process of converting debt into equity occurs sufficiently often in banking to have a name: resolution. Resolution offers a way for Irish banks to be adequately recapitalised at no cost to the taxpayer, and able to manage their business without political interference.
Under existing Irish corporate law, this transfer would be a recipe for centuries of litigation. That is why most other industrialised economies have, or are introducing, special legislation to resolve failing banks with limited judicial review. Particularly impressive is the UKs Special Resolution Regime introduced last February, which could easily serve as a template for similar legistlation here.
Instead we will get Nama. Brian Lenihan assures us that Fianna Fáils monument to a decade of waste, corruption, and ultimate ruin will not be wasteful, corrupt, and ultimately ruinous.