International reaction to the Government’s controversial Nama scheme, details of which emerged on Wednesday, has largely been positive.
The Economist, in its print edition, gave a guarded welcome to Nama, saying that the plan "makes a good fist of a bad situation".
"Despite its flaws, the Nama plan seems like an advance over those in some countries - at least it gets something done," it said.
The Economistsaid the Government faced an "unpalatable choice" in deciding how much of the banking industry's loss should be inflicted on shareholders and how much on taxpayers, concluding that the banks seem to have got the better of the deal.
"The Government seems to have erred on the side of favouring shareholders, largely to minimise the amount of capital it would have to inject into the banks," it said.
However, it added that while Irish banks seem to be getting off lightly, this may not last long once incoming Central Bank Governor Patrick Honohan takes the helm.
Mr Honohan, the Economistnoted, has previously argued that holders of subordinated bank debt ought to suffer when banks fail and is therefore likely to take a hardline stance.
The Lex column in the Financial Timessaid that by itself, the scheme does nothing for Irish banks' capital positions. But it went on to add that the scheme "creates some certainty about a portion of their losses and allows them to tally how much money they need to keep in business."
Nonetheless, the FTstated the scheme is unlikely to purge all bad debts and says that "if anything, asset quality could deteriorate further as the economy deflates."
The Wall Street Journalreported on the rise in share values in the country's two largest banks yesterday following the Government's announcement on the scale of loans to be transferred to the agency. However, it struck a cautionary note.
"Plenty of uncertainty remains. Nama has yet to win parliamentary approval. And crucial details such as the coupon on the government bonds the banks will receive in payment for their assets have yet to be agreed. And then, of course, there is the Irish economy, which despite recent evidence of stabilisation, remains very fragile," it said.
The Daily Telegraphalso reported on the sharp rise in banking shares yesterday saying that "the battered Irish economy enjoyed a mini-revival banking shares soared after the Government unveiled its "bad bank" plans."
Business Weeknoted that the legislative bill to create Nama "faces a fractious month-long passage in Dáil Éireann."
Elsewhere, the London Independentsaid that many of the arguments levelled by opponents of Nama were similar to those levied in Britain over the Government's bail-out of the banking system and creation of an "asset guarantee scheme".
