A new report by the economist who designed the National Asset Management Agency has recommended selling the agency to a private equity investor.
A study by Peter Bacon, commissioned by Treasury Holdings, says NAMA is not achieving its potential.
He says NAMA faces a major challenge in seeking to recover at least its outlay and costs from the management and disposal of its loan assets.
He wants a change in the way NAMA operates and says the Government should undertake a review of the business strategy of the agency, including the statutory basis on which it is based.
Selling part of NAMA to an international private equity investor or property investment company could provide a better return, the ''Contribution to the Debate on the National Economic Recovery'' report states.
In his report, the economist also suggests setting up a new mortgage bank and establishing a state investment bank.
He suggests that the mortgage bank would compete with commercial banks to provide mortgages for buyers of residential property. He says it would address the issues that are currently keeping buyers out of the market and he recommends that it should be formed as a joint venture between the state and a private sector partner.
The state investment bank would provide venture capital for companies. Mr Bacon says that while Enterprise Ireland has been undertaking a role along those lines for some years, the activity should be spun off into a separate entity with public and private shareholding. This would promote long-term economic development, the economist adds.
The report also looks at the economy and it urges the adoption of alternatives to current economic policies if Ireland is to avoid having a stagnating economy for many years to come. The economist says that a key to stimulating domestic demand is growing consumer confidence, and a key to growing consumer confidence is getting the housing market working again.
Despite the fact that today's report has been commissioned by Treasury - which is one of Nama's biggest debtors - Mr Bacon says its findings are independent.
A spokesman for NAMA said the agency did not wish to comment on the report, other than to note that it was commissioned by Treasury Holdings, which is currently engaged in litigation with the agency.
NAMA also pointed out that two-thirds of debtors are engaging co-operatively with the agency.
