The European Central Bank has issued a written opinion on NAMA today which broadly approves the scheme but highlights concerns about the price NAMA will pay for banks' assets.
The ECB says the measures in the draft NAMA legislation 'should restore confidence in the Irish banking system' but it goes on to say that the price of whatever assets are acquired should be 'determined by market conditions.'
It says the assumptions to determine the 'long-term economic value of bank assets' should not involve 'premium payments to the participating financial institutions' in order to avoid 'inappropriate incentives' for banks using the scheme.
The ECB says NAMA should have a guiding principle of 'risk sharing in order to minimise the cost to the government.'
