New National Asset Management Agency to free up funding for business - Connick

"It is vital that banks are actively encouraged to start lending to small business in particular, to help to protect jobs and stimulate growth in the local economy. Banks provide the lifeblood of the economic system and small and medium sized enterprises provide the lifeblood of our local economy."

"If banks do not lend to individuals and businesses the economy will contract even further, jeopardising jobs and livelihoods."

"It is vital that banks are given a clean bill of health if they have big loans that cannot be serviced and allowed to strengthen their balance sheets and increase the flow of credit, particularly to small and medium sized enterprises."

"The Government, through NAMA will purchase the land and development at an economic price that reflects the current economic climate. Both the developers and banks will take a significant loss where they were originally purchased at an inflated price. NAMA will realise these assets over time in a way that protects the taxpayer."

"NAMA will not allow developers or other borrowers to get out of paying their loans they will have to repay what they owe, just as if the loan was with their original lender. It simply allows that original lender to free up extra monies to continue to lend."

"It is expected that the value of these loans will be in the region of €80 to €90 billion and will be considerably less than the original full value of the loans as NAMA will take into account the current values or property, land or developments. The original lender will have to take on these losses."

"While this move will increase the national debt, NAMA will try to cost the servicing the debt from income accruing from the assets. The debt itself will be repaid from funds raised from the sale of assets or the repayment of the loans by the existing customer."

"The Government has taken this move to ensure the stability of the Irish financial system and promote lending while also seeking to protect the interests of the taxpayers."

"This measure is not designed to save developers it is designed to increase the capability of banks and financial institutions to lend to stimulate economic growth which is vital for the future of local industry and jobs," concluded Deputy Connick.

ENDS

For more information please contact:

Sean Connick, TD; 0872564576