TAOISEACH BRIAN Cowen has said that it is likely that the Dáil will have to be recalled in early September to debate the legislation setting up the State’s toxic loan body, the National Asset Management Agency (Nama).
The Government also aims to publish legislation relating to Nama “bad bank” before the Dáil summer recess, which begins on July 9th, Mr Cowen told the Dáil.
The Taoiseach said that the Minister for Finance Brian Lenihan was targeting the publication of the legislation before the recess.
It’s believed that the draft outline of the legislation, known as the heads of bill, could be published as soon as next week as it may go to Cabinet on Tuesday.
Nama is being established to buy at a discount yet to be announced bad property loans of between €80 billion and €90 billion from the financial institutions guaranteed by the Government.
Mr Cowen told the Dáil that the discount on the loans to be acquired would depend on the quality of the assets.
Fine Gael leader Enda Kenny had said that the banks were saying that the discount would be 20 per cent, while the Green Party, the junior Government partner, suggested that the discount would be 40 per cent.
Mr Cowen said there was no confusion on the Government’s part regarding the establishment of the agency.
“This is an arduous and complex task and it is being proceeded with as a priority,’’ he said.
“The question of valuation will be part of that process when we get Nama up and running.”
The appointment of legal advisers to Nama, which was due yesterday, was put back to today.
In a separate development, Bank of Ireland said that it purchased debt worth $600 million at 40 per cent of the nominal value as part of its debt buy-back deal to boost its loss-absorbing capital.
This brought the total value of the bank’s purchases of debt to €1.7 billion.
The bank said that the combined capital gain is expected to be about €1 billion.
The debt buy-back programme would have boosted the bank’s equity tier one capital ratio – the key measure watched by market on the bank’s ability to absorb losses – from 6.2 per cent to 7.1 per cent at the end of March and the bank’s core tier one ratio from 9.5 per cent to 10.5 per cent.
The bolstering of the bank’s capital will help protect it against projected losses of €6 billion over the three years to March 2011.
An announcement on the reforms of banking regulation is understood to be imminent.
The Government has previously outlined that it plans to merge the Central Bank and Financial Regulator, while the regulator’s consumer information role where 30 staff are employed is expected to be moved to the National Consumer Agency.
The legal roles within the regulator’s consumer body will likely remain with the new entity.
