Public needs reassurance on workings of Nama

Nothing in terms of even a nascent economic recovery can occur unless the current banking crisis comes to an end - and that applies as much as it does to the rest of the world as it does to Ireland. Thus, the removal of the billions of euros of impaired loans to property developers from the balance sheets of the Irish banks and their transfer to the new National Asset Management Agency (Nama) is the crucial first step in this recovery. However, the comments by Michael Somers, the senior public servant charged with running Nama, to the Dail"s Public Accounts Committee (PAC) last week rattled more than a few already frazzled nerves. He told the Dail Committee that he had no idea about how the new agency will work nor how many staff it will need to employ. In short, he has been given no details of its operation. Given the crucial nature of the work Nama will perform, the lack of direction from the Government is more than mildly worrying. Finance Minister Brian Lenihan countered at the weekend by insisting that the Government is taking its time with putting Nama into operation because it wants to do it right and avoid having the project derailed by the types of legal challenges that are inevitable from some of the country"s property developers who may feel hard done by if the new agency is given the powers to, for instance, seize property or land. It is certainly important that Mr Lenihan gets its right, for this has the potential to be a millstone around the necks of the country"s taxpayers for a generation or more if it all goes wrong. When it comes to Nama, the stakes are incredibly high and an increasingly nervous population needs reassurances that this so-called 'bad bank" will be able to take the toxic assets off the banks" balance sheets, thus allowing them to lend into the economy again and stimulate business, growth and jobs. However, a Government whose credibility is already hanging by a thread is not doing a good job in steadying the nerves of the country. While Mr Somers" candour is certainly refreshing, coming from a senior public servant, it has not helped the confidence of the public in believing the Nama 'bad bank" option will be the saviour of the country. Even when it does get up and running, Nama faces a horribly complex and lengthy task - the main one being the taking into public ownership of the thousands of properties and landbanks which were massively overvalued and were the collateral against which billions of euros were advanced to developers to build upon. The new agency will now have to put a valuation on these thousands of properties in a market where valuations are anyone"s guess. Nama will buy up these loans from the banks at a discount and, over the next decade or so when the property market recovers, sell the investments on. There are too many ifs and buts in there for anyone"s liking, but Nama still represents the best chance Ireland has of cleaning up this mess. Without a plan to clean up the banks" balance sheets, the Irish economy stands no chance of recovery. Michael Somers may have done the taxpayers of Ireland something of a favour last week by coming out and hinting at the strains that are evident behind the scenes when it comes to Nama. It has at least focused a media debate on its potential structure and operations, even if real information remains scant. Given the liability that we all share in this matter, the taxpayers of Ireland need to know what precisely is proposed with Nama and how it will work. Traditional Government secrecy needs to be set aside in favour of a more open and transparent engagement with the public on this matter of extreme importance for the country"s future.