There is no silver bullet solution to our truly enormous banking fiasco

HIGH Court judges Peter Kelly and Frank Clarke found the business plans of Liam Carroll’s Zoe group to be artificial and fanciful. I fear the NAMA plan would equally fail their scrutiny. This does not mean NAMA isn’t a viable solution.

The emerging enormity of our banking fiasco is such that there clearly is not a single silver bullet solution. Finance Minister Brian Lenihan has to be commended for his level of self-assuredness, even if the facts don’t stack up.

The IMF estimated Irish bank losses to be €35bn arising from toxic loans of €90bn. Whatever formula is devised to absorb this financial disaster over a decade is fraught with danger. The greater the impairment and write down of loans, the more capital is required for bank balance sheets. The higher the amount of bank recapitalisation, the less the market will finance it and the liability reverts to the taxpayer. These sorry consequences are most evident in Anglo Irish Bank and Irish Nationwide.