The National Asset Management Agency an artists comment.
I have stayed away from even attempting to cover the Irish recession in my photography and possibly this has been a mistake something I may be addressing. While I was looking for some landscape locations at the Quays, St Mullins Co Kilkenny, I came across this old mill shed that has been used by a local artist to make what I feel is the perfect statement about what has been taking place in Ireland over the last three or four years.
I was amazed by the creative mind that could make great use of such a well visited and public location in Co.Kilkenny to make a clear comment.
The painting on the shed’s door and buildings end is very powerful and provocative let alone brilliantly painted.
However I think the use of the inside of the covered space at the side of the mill is the most powerful part of this work. It’s clearly reminds the viewer that a lot of people in Ireland have lost almost everything during these last years. The idea that this is a family’s living space in the remains of an old mill is not that far from the truth.
When I looked through the images at home something occurred to me, I don’t think that most people (living in or outside of Ireland) know what NAMA is, so let’s take a look at the official definition.
National Asset Management Agency
“The National Asset Management Agency (NAMA; Irish: Gníomhaireacht Náisiúnta um Bhainistíocht Sócmhainní) is a body created by the Government of Ireland in late 2009, in response to the Irish financial crisis and the deflation of the Irish property bubble.
NAMA functions as a bad bank, acquiring property development loans from Irish banks in return for government bonds, primarily with a view to improving the availability of credit in the Irish economy. The original book value of these loans was €77 billion (comprising €68bn for the original loans and €9bn rolled up interest) and the original asset values to which the loans related was €88bn with there being an average Loan To Value of 77% and the current market value is estimated at €47 billion. NAMA is controversial, with politicians (who were in opposition at the time of its formation) and some economists criticising the approach, including Nobel Prize-winning economist Joseph Stiglitz who has said that the Irish government is “squandering” public money with its plan to bail out the banks.
One year after NAMA’s establishment the Irish government was compelled for other but similar reasons to seek an EU-IMF bailout in November 2010, the outcome of which will have considerable effects on NAMA’s future operations.
As a result of the collapse of the Irish property market, Irish banks have property development loan assets secured on property with a market value significantly below the amount owed. Many of the loans are now non-performing due to debtors experiencing acute financial difficulties. Both factors have led to a sharp drop in the value of these loan assets.
If the banks were to recognise the true value of these loans on their balance sheets, they would no longer meet their statutory capital requirements. The banks therefore need to raise further capital but, given the uncertainty around the true value of their assets, their stock is in too little demand for a general share issuance to be a viable option.
The banks are also suffering a liquidity crisis due, in part, to their lack of suitable collateral for European Central Bank repo loans. Along with their capital requirement problems, this is limiting the banks’ ability to offer credit to their customers and, in turn, contributing to the lack of growth in the Irish economy.
How NAMA will work
The National Asset Management Agency Bill present format, covers the six financial institutions which are covered by the Irish government’s deposit guarantee scheme. Those institutions are Bank of Ireland, Allied Irish Banks, Anglo Irish Bank, EBS, Irish Life and Permanent and Irish Nationwide. Other institutions, such as Ulster Bank, which are not covered may choose to join the scheme.
The Minister for Finance, Brian Lenihan, said the banks would have to assume significant losses when the loans, largely made to property developers, are removed from their books. If such losses resulted in the banks needing more capital, then the government would insist on taking an equity stake in the lenders. Economist Peter Bacon, who was appointed by the government to advise on solutions to the banking crisis, said the new agency had potential to bring a better economic solution to the banking crisis and was preferable to nationalising the banks.
The assets will be purchased by using government bonds, which may lead to a significant increase in Ireland’s gross national debt.
The Bill provides that NAMA will be established on a statutory basis, as a separate body corporate with its own Board appointed by the Minister for Finance and with management services provided by the National Treasury Management Agency. 
The Bill envisages that NAMA will arrange and supervise the identification and valuation of property-backed loans on the books of qualifying financial institutions in Ireland, but will delegate the purchase and management of these loans to a separately created Special Purpose Vehicle (SPV). “
This is the key statement to me:
“The assets will be purchased by using government bonds, which may lead to a significant increase in Ireland’s gross national debt. ”
So people who didn’t have any debt, people who were careful enough not to along with kids who are just getting a start in life, have now taken on the debt that other people (Banks/Investors and developers) created.
In pure terms that’s it and the questions that remain after all this, they relate to personal/individual choices and freedoms.
Well if after spending a life time being careful with your time and money you still find yourself personally indebted, to a level you cannot even imagine, Debt created by the organisations and governments in which you placed your (trust, money and votes). You can very easily ask, what was the point of you being careful in the first place.
This is the amount that every person in Ireland is now in debt:
€390,969 Foreign debt per person in Ireland
How the hell did that happen?
Personally I worked on call, seven days a week for 30 years. Got married, Pay for a simple house, never used a credit card. I lived in a city and used the bus and train. I only purchased a car when I had saved up for one.
Why, when I am now involved up to my neck in €390.969 worth of debt?
Hay, Never mind – on and up!