It is interesting to recall that Sweden went through the same sort of problem in the early 1990s that the national asset management agency, NAMA, is now facing. It had a real crisis on its hands. Can we learning anything from what Sweden did? It came out of the crisis very well in the end. I believe we can too and the NAMA solution appears to be rather similar to the solution adopted by the Swedes.

There was also reference yesterday to Paul Krugman, who referred to “Erin go broke” last week in a newspaper column in the United States. One of the speakers at the conference yesterday had heard Paul Krugman speak last month. Mr. Krugman said that we must get the solution right because President Roosevelt did not get it right in the 1930s. He said that what happened was not a ten year recession, as we thought, but a 70 year recession due to the mistakes the Americans made in the 1930s. I am not sure if that is correct, but Mr. Krugman went on to say that if we do not get it right now, the depression could continue until 2079. That should wake us up.

I am aware that concern has been expressed about the large number of people needed to staff NAMA; there has been talk of 1,000 employees costing millions of euro every year. The agency denies this and says it is not planning to recruit large numbers. How will it do this? The agency is expected to rely on the same framework used for other bodies under the control of the State, such as the National Development Finance Agency. Those bodies employ outside contractors. Contracting out parts of the work is fraught with difficulty over control issues. Staffing would have to avoid any suggestions of conflict of interest. If somebody moved to the agency from a bank, for example, they could not be permitted to be involved in working on loans they were dealing with while they were employed by the bank.

At the beginning of the crisis I expressed concern about the controls that would be placed on the amount of remuneration if the State is to get involved in business, be it banking or otherwise. I said that if I was running a bank, I would wish to ensure that we employed the best person and if the best person needed to be paid more, we should do that. I have changed my mind on that now. There are so many ex-bankers available for work it will not be necessary to pay the outrageous sums that were paid on that basis previously.

The Government had to make a decision on the toxic loans held by the banks. It decided to create NAMA on the advice of Dr. Peter Bacon and his associates. The option is worthy of being given a chance. We should run with it. Hopefully, during further debates on the issue we will adjust, temper or amend it to improve it. Dr. Alan Aherne said last week that “commercial banks function better than State-owned banks”. We might argue that commercial banks did not do a very good job in recent years but they were supposed to be overseen by the State-owned Central Bank, so let us not assume blame should automatically be placed there on that basis.

If there is to be a recovery from the financial crisis, it will have to be export led. We have not taken strong enough account of that. This is an issue that is not recognised. I believe the Minister of State understands that, but others do not. I am concerned by a report in the Sunday Business Post that smaller development loans may remain under the management of the country’s banks. This is intended to allow the NAMA to concentrate its resources on higher value lending relationships. It is obviously complex to take over a large number of smaller loans but it appears strange that when we need work such as this to be done through a new public sector body, we intend to recruit from the private sector when we have civil servants who are among the highest paid in Europe and far more of them than we require. It is understandable that the public gets cynical when moves such as this occur. Has it been decided for definite whether these smaller loans will be left to the banks?

Will the foreign-owned banks operating in Ireland, which have privately expressed interest in signing up for the new scheme, be part of NAMA? At what stage are the negotiations? I accept they are not yet concluded but this problem has confronted us for at least six months, as has the possibility of this occurring. We have taken our time on this issue. I am anxious to see some urgency on this scheme. When we get around to dotting the i’s and crossing the t’s, we will have had sufficient time to think about it. The motion tonight is worthy of being the first debate on that to take place.

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