Why NAMA will lose €11.65bn

The Government has designed NAMA in such a way that it will absolve the Banks from the consequences of their extremely bad lending in the amount of €77bn.

It was that €77bn bad lending, and more besides, which forced the State (that’s us) to guarantee all the Liabilities of the banks yes, all the liabilities of the banks, amounting to €420bn. By any measure €420bn was a massive temporary bailout.

The Government has further arranged things so that NAMA (that’s us, the taxpayers) will buy the €77bn bad loans from the banks. The €77bn is made up of two categories of loans, €30.8bn performing loans (which provide some income) and €46.2bn Non-performing loans (mainly secured on development land having doubtful, little or no value).