Three briefing documents have been released this evening. The first two documents are quite short and rendered effectively shorter by the amount of redaction. The third document is lengthy.
(1) Kevin Cardiff, the €228,000-plus a year secretary general of the Department of Finance, gives his view on the strategic challenges. To the fore is instilling domestic confidence in the economy followed by “begin [ing] the process of restoring international confidence”. The only un-redacted bold text is the following “it is essential that policies recognise our dependency on the ECB and the implications this has for our room to manoeuvre and capacity for independent action”. In terms of the new government’s commitment to giving us the news, good or bad, it is perhaps surprising that we have not had confirmed that “the domestic side of the economy may well be weaker this year than thought” though it seems that the exports are performing better than thought. It is interesting that about a third of the document has been redacted.
(2) A briefing on the banking position from second secretary at the Department of Finance, Ann Nolan on 9th March, 2011. This claims that €80bn of loans has so far been removed from the banks to NAMA which is at odds with the NAMA statement that some €72bn of loans has been acquired. We find out a little more about what Minister Noonan described as the €7bn placed in the banks in February 2011 which “ye [the media] didn’t pick up”
The NAMA for sub-€20m loan exposures at AIB and Bank of Ireland has been 100% redacted.
(3) A 253-page document providing presentations for each of the individual departments comprising the Department of Finance. I am still studying this but in the context of NAMA, property and the banks.
(a) The “Confidential side letter dated 9th December 2010” is referred to again in the context of the EU/IMF bailout. We are told that one of the terms it contained related to the lowering of Stamp Duty.
(b) The House Price Database would have been included in Budget 2011 if it weren’t for “time pressures”. There seems to be an intention to model the HPD on what is available in “the UK and some US states”
(c) There is to be a €100 property tax in 2012 and a property valued tax thereafter. The Commission on Taxation (?) is not keen on a Site Valuation Tax because it is “rarely used for tax collection in other jurisdictions”
(d) An informal decision on the 31st Jan 2011 Anglo and INBS restructuring plans is expected “in a few weeks”
(e) Much of the NAMA briefing between pages 92-96 is redacted and there is no real new information.
(f) The Central Bank of Ireland now has 1,200 staff (!) of which just over half work in Financial Regulation.
(g) From page 123 to 130 there’s a who’s-who of the boards of the covered financial institutions including the year in which they joined the boards. Looks almost like a hit-list.
(h) With respect to the wider economy the document reminds us the CPI inflation assumption for 2011 was 1.5%. CPI inflation is already us 1.6% to the end of March 2011 compared with end December 2010 (index of 122.2 cf 120.3).
It’s the same circus with a different set of Clown’s.
Is it just me or have NAMA gone very quiet in the last couple of weeks? I think the department having created the 2 pillar banks might have the re-organisation of NAMA in it’s sights next.
No, not just you, NAMA has gone a little quiet which is surprising because you expect lots of skin and fur to be flying with agreeing business plans and indeed starting disposals on a serious scale. But other than the Paddy Kelly receivership, not much is escaping from the agency. They are still quietly recruiting, there is a year end report whose publication we’re awaiting and next Tuesday will be a red-letter Paddy McKillen day. Remember Minister Noonan’s director of elections in Limerick was Brian McEnery, NAMA board member and I’m sure FG have some specific modifications to the operation of NAMA in mind.
Since the Paddy Kelly receivership the developers’ attitudes have hardened. I can’t see much agreement coming from NAMA. The “body language” at the meetings is very bad by all accounts.
NAMA seems preoccupied with getting their arms around all the rental income that they can at present. They are meeting resistance as investors want to deduct for tax payments and management.
There are more hurdles yet to be jumped before we get to the disposal phase.
Word is that there is a lot of sneering and self satisfied smugness going on in NAMA about showing the US vulture funds the door. But it is also accepted that they paid far to much for the first tranche of loans and that it is going to be very difficult to get back the NAMA purchase costs on this particular element.
The staff have also been told that they are not a bank and lending more money (in the words of one M. Thatcher) is “out”. It will be all about sales and getting the money in – just as long as it exceeds what NAMA paid.