MINISTER for Finance Brian Lenihan has said the legislation establishing the State’s “bad bank”, the National Asset Management Agency (Nama), must be able to “resist legal challenge”.
He said the legislation needed to be “robust” and this was why the establishment of Nama was “not something to be rushed into”.
“We can’t have a lawyers’ bonanza and that is another good reason why we have to get this right,” the Minister told RTÉ yesterday.
Bank of Ireland is expected to include some detail on the future of governor (chairman) Richard Burrows when the bank releases its financial results for the year to the end of March 2009 today.
Mr Burrows and Irish Life Permanent chairwoman Gillian Bowler are the only surviving bank chairmen following the spate of recent retirements and resignations across the banking sector.
The Bank of Ireland governor is expected to step down over the coming months as a result of the bank’s rising property loan losses.
Davy Stockbrokers is forecasting a pretax loss of €218 million at Bank of Ireland for the year due to a higher-than-expected bad debt charge of €1.6 billion and one-off charges of €378 million.
This will be the first results presentation made by Richie Boucher since he became the bank’s chief executive.
The Government has yet to appoint two more directors under the terms of the €3.5 billion recapitalisation which gives the State 25 per cent voting rights and the power to appoint four directors.
Mr Lenihan is understood to have spoken to Dr Michael Somers, chief executive of the National Treasury Management Agency, before the Minister appeared on RTÉ’s Morning Ireland yesterday to clarify Dr Somers’ comments on Nama last week.
The Minister played down the significance of the comments by Dr Somers before the Committee of Public Accounts last week.
Dr Somers said that he did not know how Nama would operate and that his agency was not adequately staffed to operate the new body.
Mr Lenihan said “the precise corporate structure of Nama” had yet to be decided by Government.
“There is absolutely no disagreement between Dr Somers and myself about the need to establish Nama, but what Dr Somers was pointing to was that, despite the enormous media speculation, there is an awful lot of practical work to be done here,” said the Minister.
Mr Lenihan said Nama was likely to have a small staff and outsource much of its work.
Proposals for tenders for legal advice, valuations and property management expertise will be received next week, the Minister said.
One option is to directly manage the loans of a group of the largest developers, although Mr Lenihan refused to say how large the group would be: “I am not saying 20; it could be 30, 40, 50.
“Clearly the high exposures will have to be managed on a centralised basis because many of their exposures . . . go right across the banking sector and are not restricted to one particular bank,” he added.
The Minister moved to clarify his stance on bank nationalisation, saying he was not opposed to it.
“What I have said is that I am opposed to wholesale nationalisation – that means you nationalise 100 per cent of your banking sector,” he said.
