NAMA, banking policy - We need clarification

Despite the downgrading of this country’s credit rating by Standard and Poor’s this week, the National Treasury Management Agency borrowed another €600 million by selling Treasury Bills at an interest rate that was close on 0.5% lower than the rate at which it borrowed a couple of weeks earlier.

Of course, the rate is still significantly higher than the country enjoyed before the current economic down turn. Yesterday’s development should be welcomed but there is no room for complacency, because the Government still needs to clarify its strategy in relation to the banks.

Too many questions remain to be answered about the future of Anglo Irish Bank, as well as Allied Irish Bank and Bank of Ireland. How much money will each require, and what will the ultimate cost be?

Until such questions are answered comprehensively, international investors are going to be very wary of Irish banks. Unless there is clarity at home, it is unrealistic to expect international bondholders to have faith in our banking sector. Thus the Government needs to clarify its exact strategy in relation to National Assets Management Agency and the banking sector.