THE INCOMING chairman of the Irish Association of Investment Managers (IAIM) has described Nama, the Government’s “bad bank”, as “an unpalatable but essential first step towards economic recovery”.
In a speech to IAIM’s annual dinner last night, Gerry Keenan, chief executive of Irish Life Investment Managers, said that therewould be “significant investor support” through equity support in banks and investment in Government debt as Nama is implemented.
Mr Keenan told the dinner, which was attended by Minister for Finance Brian Lenihan, that he disagreed with the Government’s “focus” on pay to non-executive directors on the boards of banks “at the expense of a necessary review of their responsibilities”.
“While I can understand the public outrage which exists at the remuneration paid to non- executive directors at the banks, the real outrage should be at their failure to honour their responsibilities rather than their pay rates,” he said, adding that the investment community must demand more of non-executive directors.
Mr Keenan called for “a strengthened, more muscular regulator” and a regulatory regime which “synchronises the often contradictory objectives of profit maximisation on the one hand with the public interest on the other”.
He said that the investment community knows that Nama is not perfect, but most investors believe “more damage is likely to be done by waiting for perfect solutions”.
He said some members of IAIM, which represents large fund managers, including major shareholders in the banks, “strongly disagree with the concept of the taxpayer coming to the support of failed banking enterprises”.
Nama achieved “a reasonable balance between the need to support a very fragile banking system on the one hand, and the need to protect the taxpayer to the greatest degree possible on the other”, Mr Keenan said.
A Yes vote in the referendum on the Lisbon Treaty and a reduction in expenditure in the December budget were critical to economic recovery, he said.
