NATIONAL ASSET MANAGEMENT AGENCY 'A STEP IN THE RIGHT DIRECTION' - The big plan for our banks was unveiled in the Budget yesterday - the establishment of the National Asset Management Agency. This new agency will buy up to €80-90 billion of toxic loan assets from the banks and building societies covered under the Government guarantee. Those assets are then exchanged for bonds which are taken to Europe and exchanged for cash to lend to the Irish economy.
Dr Elaine Hutson, of the Michael Smurfit School of Business at University College Dublin, says that yesterday's announcement on the new agency was a step in the right direction. She said she does not agree with the negative commentary about the agency and says it is very, very difficult to devise strategies to get rid of toxic debts. She says, in her opinion, what is important is the fact that taxpayers are given some upside in these rescue plans. She says this plan does give some benefits back to the taxpayer, despite not being perfect.
Dr Hutson says the setting up of the agency is opening the door to partial nationalisation. She says that while the banks do not seem to be worth much at the moment, hopefully Irish and international investors will have some faith in the future recovery in the Irish economy. That is where the value will come from, she states. As the value of the banking shares increase they should offset the cost of acquiring the loans in the first place.
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MORNING BRIEFS - The Competition Authority is appealing in the Supreme Court a High Court decision to allow Kerry Group complete its acquisition of Breeo Foods. In a statement last night, Kerry said that it is determined to defend its position and will resist the appeal. The deal is worth €165m.
*** On the currency markets, the euro is worth $1.3184 and 89.8 pence sterling. The euro is weaker against other currencies this on renewed worries about the economic weakness of the euro zone.
