For the 75/80 employees of NAMA (20 so far recruited) together with the army of external service providers, a consideration must be entertained as to how the lifespan of NAMA will impact on their continuing financial health. After all, if NAMA can be stretched to last 20 years and not 7-10 as presently expected, then it would be a poor employee or consultant that wouldn’t consider the financial opportunities. So what is to stop NAMA becoming a self-perpetuating piggybank for a small number of employees and large number of external service providers? What astute person or service provider would work themselves out of a job? It is interesting that with other country’s asset management companies, there has been an emphasis on developing employees so that they will have access to better opportunities in the private sector as the asset management company is wound up, so if you’re a lending analyst at NAMA, attention is given to how the experience can be developed to elevate you to a fantastic and lucrative role in the private sector when NAMA is wound up. A motivational challenge for NAMA may be convincing its employees of these opportunities. Another tool is to ensure employee contracts align with the objectives of the owner (the government and citizenry) for example by aligning contracts timeframes with the envisaged timeframe of NAMA or by setting job objectives and bonuses in the context of NAMA’s objectives. Pay and bonuses are controversial areas but to ignore human nature, even for NAMA employees, might be a false economy. Third party suppliers of services need to be handled more ruthlessly and the emphasis must be on ensuring NAMA control the external service providers and frame any contracts to support and encourage the fulfilment of NAMA’s own objectives and timeframes.
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NAMA Wine Lake 
Fat chance of this ever happening I would suspect that the big boys on top have already put the word around town that only friends of friends need apply
Very well said. I would have no problem incentivising Nama staff with termination bonuses for good work. As you know, it is very easy to set up quangos and much harder to close them down, think AnCo -> FAS.
Here are two somewhat related issues:
1. Nama staffers/advisers who are former employees of professional firms (law, accounting, property, construction, banking etc.) negotiating with these same firms who might represent banks or borrowers.
2. Firms acting as advisers to Nama as well to banks and borrowers.
I know about protocols, checks and balances, chinese walls etc. and Nama will claim that it can manage these. But people are human and even with the best will in the world it can be very difficult to disrupt old boy networks and past/present affiliations or personal relationships within a small pond. Once the dust settles, it would be interesting to create a chart showing past links, overlaps and professional relationships between Nama and providers of services to banks and borrowers.
I would have thought that Nama should have sought to make very extensive use of professionals who would have had no strong local connections e.g. from UK. This would have left the local professionals in the clear to put all their weight behind their banking and developing clients.
Icarom plc (under administration), the holding company set up to manage the last AIB disaster to be bailed out by the state, the Insurance Corporation of Ireland, was established in 1985 and was supposed to be wrapped up by 2012, but is now projecting that it will still be needed up to 2050.
Icarom employs at least four full time staff, and plenty more under contract. Of these external staff, the most prominent one has to be the Administrator, Donal O’Connor, who worked at Icarom for Price-Waterhouse Coopers for decades, but is now better known as chairman of (nationalised) Anglo Irish Bank.
I have been doing some research for a forthcoming entry which will compare asset management companies for impaired assets internationally. One that is cited regularly in a good way is Securum (and its brother Retriva) that helped rescue Sweden’s economy in the 1992-1997 period (5 years! even though it was thought it might have a lifespan of 15 years).
Sweden’s property dropped by 25% in its crisis and 70% of the companies and people taken over by Securum were made bankrupt within a year (what does that say about NAMA’s 20% default rate where property has dropped by 50% and the crisis is international and we’re members of the EU and we don’t have our own currency!).
However what was particularly interesting is that if Securum was allowed function for another few years it would have made an even greater financial return because property prices were improving. As NAMA’s character changes from a loan manager at the start to an asset manager later on (might only take a year if Sweden was representative) it is important to carefully consider the NAMA lifespan because the temptation may be to leave NAMA open for 20 years because property may improve relative to financing costs in the 2020-2030 period.
I’m not sure what steps have been taken to stop NAMA becoming a self-perpetuating piggybank for a few.
[…] This post was mentioned on Twitter by Ana Nelson. Ana Nelson said: Indeed a challenge but very interesting experiment opportunity https://namawinelake.wordpress.com/2010/04/26/working-yourself-out-of-a-job/ […]