Ireland values bad loans

THE Irish government will spend &euro;54bn (&pound;48bn) to buy risky real estate loans from the Republic&rsquo;s banks, finance minister Brian Lenihan said yesterday.<br /><br />The loans are to be transferred into the government&rsquo;s &ldquo;bad bank&rdquo;, the National Asset Management Agency (Nama), which will pay a 30 per cent discount on the book value of &euro;77bn.<br /><br />&ldquo;Nama will ensure that we avoid the Japanese outcome of zombie banks,&rdquo; said Lenihan.<br /><br />The scheme is particularly targeted at rescuing Bank of Ireland and Allied Irish Banks, both of which are burdened by billions of euros worth of deteriorating loans.<br /><br />But Lenihan said the banks might still need to raise new capital to support themselves.<br /><br />The Irish government was forced to nationalise the country&rsquo;s third-largest lender Anglo Irish Bank earlier this year to prevent its collapse.