Like skywatchers in County Mayo waiting for the Rapture, NAMA-watchers are beginning to set up camp in expectation of tomorrow’s revelations from the Father, Son and Holy Ghost of our banking rescue. Brian Lenihan is expected to give an overview of NAMA’s progress to date and what it will mean for banks’ balance sheets, the recapitalisations and possibly the creation of the long-awaited Third Force in Irish banking. The Son (and he may be independent but he knows who his Da is), or the duo of the Regulator and CB Governor will give us their thoughts on minimum capital levels and possibly bash the banks’ past behaviour. And the Holy Ghost, NAMA, may even make a statement on how things are running there but if it’s worth knowing then Simon Carswell has probably done a feature on it already.
But coming back to the similarities between Ryanair and NAMA, Ryanair will fly you from Dublin to Paris and will do so at prices starting at zero. However we may need pay for online booking, use of most payment methods and excess luggage. But the biggest shock might be the plane doesn’t land you by the queue for the Mona Lisa in the Louvre – you’ll need to spend some more travelling time and effort to get there. And so it will be with NAMA. NAMA will not do very much in itself to restore credit and this has been carefully explained by BoI and AIB before the Finance and Public Service committees. However it will clean up their balance sheets making it easier and cheaper for the institutions to access credit. Until they are recapitalised however (and I hope Brian Lenihan deals with impaired residential mortgages on the banks’ balance sheets), credit will not get back to normal because the betting is that banks will behave conservatively in rebuilding their balance sheets despite the best efforts of the government and the credit review channel (maybe we’ll get an announcement on that also tomorrow).
David McWilliams yesterday chastised the government for setting about confusing us with the mechanics and objective of NAMA but is he really being fair in this instance? Perhaps we’ll be better able to judge tomorrow evening after Brian Lenihan has spoken. I hope that unlike the skywatchers in Knock we come away with the satiety that we have witnessed something of lasting value.
NAMA Wine Lake 