Mr Aylward,

I disagree strongly with your comments in the Dail on September 22nd in support of NAMA.  The speech was later reproduced on your blog.  Your comments were factually inaccurate, delusional and hypocritical. 

The key issue is to repair the banking system and to maintain international confidence in investing in this country while ensuring the taxpayer is not unduly exposed.

How can you claim the taxpayer is not unduly exposed?  In order to save Anglo Irish Bank, this government guaranteed all the Irish banks.  This covered not just people with savings but also international bond holders.

These investors risk their money in the hopes of earning the rewards. Your government guaranteed their investments, and instead exposed the tax payer to all of the risk.  Privatising profits, and nationalising losses.   And you claim to be concerned about taxpayers?

We invested more into AIB and Bank of Ireland than their actual value at the time, and yet we still don't own them.  We take all the risk of their debts.  We pump in more money than they are worth as businesses, and yet their shareholders still own these banks, not the taxpayer.

You mention the dire need to get credit flowing:

Credit is the lifeblood which maintains every facet of the economy. It enables business, it facilitates enterprise and it keeps the household going.

We must restore a functioning banking system which will ensure a flow of credit into the real economy.

business is withering because it cannot get access to vital credit.

After the debts are taken over by NAMA, the Irish banks will still be massively undercapitalised.  This is an accepted fact, nobody, not even Fianna Fail dispute it.  So, NAMA doesn't get credit moving again.  The billions more that we pump into the banks after NAMA may get their capital levels back up,  but even that doesn't guarantee that they will lend as much as people want or claim to need.

If Fianna Fail truly believed that healthy banks lending money could save the country, then they had an opportunity to achieve that.

Instead of pumping billions into Anglo just to keep it alive (and not lending) they could have instead let Anglo collapse (it was never of systemic importance to the country) and they could have pumped the billions into a new bank that had no toxic assets, no capital issues.

That new bank could have started lending immediately, and with the lack of competition from other banks it would have been profitable for the tax payer from day 1.  It could have eventually been sold as a very valuable asset worth far more than the initial investment.

Fianna Fail didn't do this because Fianna Fail had already made the biggest financial mistake in the history of the State.  It had guaranteed Anglo’s debts, along with all the other banks.  The night of the banking guarantee was the night Ireland’s financial future was lost.  All chances to do the right thing were squandered.

After the banking guarantee we were told it would get the banks lending.  After the recapitalisation of the banks we were told it would get them lending.  Now we’re told NAMA will get the banks lending.  Each time, the bill for getting the banks lending has gotten bigger.  Each time the plan has failed utterly to work.  NAMA will fail too, and further recapitalisation will be proposed with the promise that it will get the banks lending.

I am afraid we do not have the luxury of choice or time.

What an easy way to sidestep valid criticism.  We have no time to argue about the pros and cons of NAMA, just do it.  Anyone who raises questions is unpatriotic, or standing in the way of recovery.

We had a great deal of time and luxury to plan for and avoid the huge speculative bubble that has brought the country to this point.  Fianna Fail used that time to make matters worse.  Fianna Fail was grossly and spectacularly wrong in it’s policies during the boom, and now we are supposed to take on trust that Fianna Fail knows what it’s doing in the bust.  No time for questions?

If they are to survive and do the job they are supposed to do, the banks must get a clean bill of health, their balance sheets must be strengthened and all the uncertainty surrounding bad debts must be reduced.

Why must they survive?  It's business. The badly run businesses must die so that better run stronger businesses can take over. When the punishment is oblivion it serves as a much better protection against bad practice than Fianna Fail’s style of soft touch regulation.  Not that that would be difficult.

NAMA has received the very important blessings of the European Commission, the European Central Bank, the OECD and the International Monetary Fund.

The European Commission has not given NAMA it’s blessing.  It is insisting on changes.  The IMF said that NAMA might be the right approach, if it happened alongside the nationalising of the banks involved.  This is crucial, and others besides the IMF have explained why.  If the tax payers own the banks outright then it doesn't matter if we over pay for the toxic assets, because we'll be buying them from ourselves.

To overpay for assets and not nationalise the banks is a pure and simple transfer of wealth from taxpayers to bank shareholders.  This farce is made all the more bizarre when we think about the fact that we have already paid enough to have bought the banks outright twice over, and we will pay more after NAMA.

A telling comment by Steven Seelig, an adviser at the IMF was that the definition of “long-term economic value” on bank loans in the draft Nama Bill was “masterful” as it was “sufficiently specific” and “sufficiently vague” to allow “appropriate flexibility”.

Is the ethos at NAMA is to focus on clever wordplay, wriggle room and the kind of fudging that has destroyed the global banking system? If NAMA doesn't make sense in plain English then it doesn't make sense at all. Clearly Mr. Seelig’s comments were well received, he has been appointed to the board of NAMA.

It is without doubt the best and most workable solution we have and it has a proven track record of success internationally.

You failed to name a single country where the NAMA model has worked (or even been tried). Please do tell.  I don't want to hear about cases that are ‘Like’ NAMA. Or models that use NAMA in conjunction with Nationalisation etc.  Show me somewhere, that overpaying for assets, in a declining market, while not nationalising the banks in question has fixed a broken economy and not lost most of the taxpayer’s investment.

You won’t be able because NAMA has no proven track record.  Your claim is a pure and simple lie.

The only case I can think of where bad banks had much success was Sweden.  It involved numerous bad banks, some privately owned.  It also involved nationalising or letting existing banks collapse, and the Swedish government lost 60% of the money they put into it.  It did however turn the economy around in 2 years (that’s less time than we’ve already been in trouble and NAMA isn’t even up and running yet).

The only similarity between NAMA and the Swedish model is that NAMA may well lose 60% of the investment, or more.

I am disgusted that NAMA has been deliberately depicted as a bailout for builders and developers. It is nothing of the sort.  To suggest otherwise is to fail completely to understand NAMA and how it will work in principle and in practice.

That’s the first thing you’ve said that I agree with.  NAMA isn’t a bailout for developers.  That’s what the Home Choice Loan Scheme tried to be.  NAMA is a bailout for the banks.  To suggest otherwise is to fail completely to understand NAMA and how it will work in principle and in practice.

It is NAMA’s clear objective and duty to continue to manage these loans and to ensure that all the obligations of the borrowers are met in full.

The notion that the banks could have gotten their money if they were just a bit tougher is disingenuous.  The thought that the heads of these banks would watch share prices and profits tumble, would watch their own reputations and jobs vanish, rather than simply get tough with their customers is a fantasy.  The claim that an agency set up by the builders party, Fianna Fail is going to be so much tougher than the banks, and actually get the money is gibberish.

This Government is most certainly not in the business of rewarding failure.

The minister for finance who presided over some of the worst management of the economy not only still has a job, he's Taoiseach.  The governor of the Central Bank who presided over the collapse of the banking system, retired with a very handsome pension.  Roddy Molloy, walks away with a pension, and a nice bonus for his efforts.  Bertie Ahern, the man who destroyed the country gets paid off, rewarded for his failure.  The list goes on.

After all, it is the banks’ shameful and naked avarice which has visited so many problems upon this nation and the ordinary taxpayer.

Their behaviour and singular lack of any ethical standards are despicable and have served to compound many of the problems this recession has brought.

After all we’ve seen, after all that has happened, a Fianna Fail TD lectures us on behaviour and ethical standards.  Your parties shameful and naked lust for power at all costs is what has visited so many problems on the nation.  The desperate election buying combined with the most unimaginable incompetence is what has left the ordinary tax payer picking up the bill, and so many former tax payers picking up the dole. 

I'm 35 years old. Less than half a lifetime if I do well.  In that short time I’ve already lived long enough to see Fianna Fail bring this country to the brink of bankruptcy twice, and on this occasion we’re still moving towards the brink rather than away from it.  I've got a few decades of working and tax paying left in me, but I'm not so stupid that I'll stay in this country and see 20%, 30% or more of my tax spent just paying interest, while services decline into an abyss.

Fianna Fail lies aren't fooling us any more.  There’s a new generation of voter, a generation that has been fleeced once by the Fianna Fail’s handling of the property bubble, and are being fleeced again by Fianna Fail’s handling of the bust that followed.  A generation that won’t soon forget.

-Richard Dalton