Ireland values bad loans
THE Irish government will spend €54bn (£48bn) to buy risky real estate loans from the Republic’s banks, finance minister Brian Lenihan said yesterday.
The loans are to be transferred into the government’s “bad bank”, the National Asset Management Agency (Nama), which will pay a 30 per cent discount on the book value of €77bn.
“Nama will ensure that we avoid the Japanese outcome of zombie banks,” said Lenihan.
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.
But Lenihan said the banks might still need to raise new capital to support themselves.
The Irish government was forced to nationalise the country’s third-largest lender Anglo Irish Bank earlier this year to prevent its collapse.