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The Way We Are Now

1. NAMA was set up by the Government expressly for the purposes of paying the “long-term economic value” for bank assets.

2. “Long-term economic value” (“LTEV”) was a notion supplied to the Government by the Commission of the European Union. This writer cannot say from where the Commission derived it, but it is possible the Commission is not “wedded” to the notion, unlike the Irish Government.

3. In the context of the establishment of NAMA, it was insinuated that LTEV was, and is, in excess of current market value. Strictly, nobody can say what current market value of bank assets are; there has been no functioning market for them for some time and the Government has imposed a secrecy blanket on possible sources of information on the point.

4. Nonetheless, some assets have been assigned current market value; this happened in Irish High Court proceedings. Those values showed a 70%- 80% fall in the value of property-based bank assets.

5. The tranfer of bank assets to NAMA, therefore, was expressly in defiance of the actual value of those assets. The price to be paid was a political decision made before NAMA was established.

6. It is a lie, consequently, to say that the banks misled NAMA. It is the people of Ireland who have been misled.


  1. The phrase “long-term economic value” refers to an economic concept about the net present value that a property brings.

    Simply put, the long-term economic value of a house is the value to you now of not having to rent the rest of your life.

    While a relatively straightforward and very important concept, and the right foundation upon which NAMA should start its work, its application has been less than thorough.

    The most thorough analysis I could do at the time suggests that the upswing of 11% was based on preliminary and clearly faulty analysis of just 5% of NAMA’s loan book.

    By the third iteration of the business plan, this 11% has been taken as gospel.