So here is my low down with this NAMA explainations... politicians take note...
The reason why the government is setting up the National Asset Management Agency is because its the best option of ensuring the stability of the financial system, the protection of depositors and ensuring that banks were freed up to lend to the real economy. The government's advisers were the Central Bank, the Financial Regulator and the NTMA and came up with this way to deal with the riskiest loan portfolios on the balance sheets of Irish banks. NAMA will buy the riskiest loans in the banks portfolios from the participating banks. This will ease pressures on the banks giving them access to cash and assets like they had before.
NAMA have the commercial powers of a financial asset management company to establish subsidiaries, to operate through agents, to buy and sell assets, to manage loans and work with borrowers, and to take full and determined action in relation to debts owed.
The report goes into more detail and boring jargon but the following are the main aims:
Total lending to the SME sector by the banks which participated in the review remained at €34.5 billionRequests for new credit were predominantly for working capital/ cashflow reasons to address reductions in revenue.The review concluded that formal lending policies have not changed but that the application of policies on the ground has resulted in a more cautious approach to lending.The cost of new credit to SMEs decreased in the period reflecting reductions in base rates. For more boring information see:
http://www.nama.ie/Publications/2009/NAMAFAQs.pdf
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