Ireland’s E54 billion ‘bad bank’ will begin transfering risky commercial property loans from January 2010, reported Reuters quoting Brian Lenihan, finance minister of Ireland. Seeking to put an end to the turmoil that has brought stock prices down 75% from their peak in 2007, the bad bank legislation will pay the nation’s major banks more than $80 billion for troubled real estate loans.
Earlier, the law to establish National Asset Management Agency (NAMA) was approved by the upper house of parliament. Banks are expected to confirm their participation in the NAMA before the end of this year.
It also needs approval from the European Commission, which said that it wanted NAMA to be set up as quickly as possible. The government is said to have already started recruiting lawyers and property valuers to have it up and running as soon as possible.
The government estimates that the bad bank will make a profit over its life span, but critics say it will burden taxpayers with assets worth far less than what the government will pay, reported the web site.
