The State's chief law officer has told the Commercial Court that the National Asset Management Agency was set up in the context of an unprecedented intervention by the State in private financial institutions.
The Attorney General, Senior Counsel Paul Gallagher, said if the banking system had failed it would have had disastrous effects on the stability of the economic system.
Mr Gallagher said you could not look at the case being taken by developer Paddy McKillen to stop his loans being transferred into NAMA without this context.
The Attorney General, who was the main author of the NAMA legislation, is leading the State's case against Paddy McKillen and his companies.
Paul Gallagher said there was a huge urgency about what NAMA had to do. He said the banks were the conduit through which the economy was preserved and the context for this case went back to the bank guarantee scheme in late 2008.
He said Mr McKillen's €2 billion worth of eligible bank loans could not have been left on the books of the banks, as Mr McKillen wanted. He said this would have jeopardised the protection and support of the banking system for which NAMA was set up.
Mr Gallagher asked if Mr McKillen was so concerned about going into NAMA, why he did not take steps to refinance his loans with non-NAMA institutions, after the proposed legislation was published in July last year.
Paddy McKillen, who is notoriously media shy, was not in the courtroom but was said to be in the vicinity of the court today.
Case 'not a bid to strike down NAMA'
Earlier, lawyers for Mr McKillen told the Commercial Court they were not in court to strike down NAMA.
Lawyers for Mr McKillen said he just did not think he, or his companies, should be dealing with the agency.
Mr McKillen's legal team finished their submissions to the Commercial Court this afternoon.
Earlier, Senior Counsel Michael Cush, for Mr McKillen, read out e-mails, which he said showed that part of NAMA's incentive to acquire Mr McKillen's €2 billion worth of loans was to make a profit. Mr Cush said at least part of this profit was for the benefit of private shareholders in NAMA.
Mr Cush also said that a loan of €40m to Paddy McKillen by Anglo Irish Bank, which NAMA claims is impaired, was a 'non-recourse loan', on which he had no obligation to make repayments.
This was a loan made to Mr McKillen to buy shares in Anglo in what was known as the 'golden circle' transaction.
Mr McKillen was one of 10 customers of Anglo approached in July 2008 to buy a 10% stake from businessman Sean Quinn. The bank organised and financed the transaction to stop the shares being sold on the open market as this would have collapsed the share price at a highly volatile time in the banking crisis.
