The Irish National Asset Management Agency (NAMA)

The Irish National Asset Management Agency (NAMA)

The National Asset Management Agency was a vehicle designed to purchase loans from banks at their long-term value. Michael explains how these valuations were calculated and provides his thoughts on the effectiveness of the vehicle and the decisions that were made surrounding it.
Overview

Ireland setup NAMA to allow its banks to move on from their bad loan problems. The government bought loans from the banks, assessing their value on a loan-by-loan basis. Although NAMA was kept off the country’s balance sheet, the state’s guarantee of the agency’s bonds had a negative impact on its credit quality. NAMA succeeded in allowing banks to resume new lending and some argue it should have been extended.

Key learning objectives:

  • Explain why NAMA was established

  • Explain the criticisms of the loan-by-loan valuation approach

  • Describe NAMA’s legacy

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Summary
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Expert
Michael Torpey

Michael Torpey

Michael began his career working with the Irish Finance Ministry. In 1992 he joined Irish Permanent Building Society as its first Treasurer and in 2000 became Finance Director at First Active. In 2010 he set up a specialist banking unit to lead the Irish State’s handling of the banking crisis. In 2013 Michael became Chief Executive of the Bank of Ireland until he retired in 2018.

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