Page last updated at 18:10 GMT, Tuesday, 8 September 2009 19:10 UK

NI 'needs say on Irish bad bank'

Finance minister Sammy Wilson
Finance Minister Sammy Wilson met Brian Lenihan on Tuesday

Northern Ireland should have a formal role in the Republic's plans to rescue its economy by buying up its banks' bad debts, the finance minister has said.

The Irish government has proposed to set up a National Assets Management Agency (Nama) to manage the debts and allow banks to start lending again.

Sammy Wilson met his Irish counterpart, Brian Lenihan, in Dublin on Tuesday.

Any large scale move to sell off Irish assets in NI could have a major impact on the north's economy, Mr Wilson said.

In April the Republic's communications minister Eamon Ryan said he believed about 15% of the bad loans Nama planned to buy would come from Northern Ireland, though some observers believe that estimate is on the high side.

Speaking after Tuesday's meeting Mr Wilson said: "Nama will obviously have some influence over the management and possible disposal of significant assets located within Northern Ireland, most notably land and development assets."

"It is imperative that this management adopts a prudent and considered position to ensure the long-term interests of the Northern Ireland economy, and indeed that of the Republic of Ireland, are protected."

Safeguard

Minister Wilson proposed that the Northern Ireland Executive should have a formal role in taking forward Nama

This would safeguard Northern Ireland's interests, he said.

Following Tuesday's meeting, a spokesman for the NI Department of Finance and Personnel said legislation for Nama had not been passed through the Dail as yet.

He said Mr Wilson had pushed for NI representation "at an appropriate level" and that ministers agreed that Northern Ireland would be "fully and appropriate represented with regard to Nama's holding of loans pertaining to NI assets".

In July, the Irish government announced plans to set up Nama - a so-called bad bank.

Discount

The intention is to unwind the crashed property market in an orderly way and allow the Republic's banks to start lending again.

The plan is supposed to involve the government buying property loans at a discount, then managing them in such a way that the Irish taxpayer will at least break even on the deal over about 10 years.

In return the banks are expected to start lending again with the money the government has paid them for the loans.

Initial estimates suggest that the value of loans Nama might take over could be in the region of 90bn euro, with a considerable element of that being located in the UK, much of it in Northern Ireland.

Three Dublin banks, Anglo Irish, Bank of Ireland and AIB (trading as First Trust) loaned substantial amounts across Northern Ireland for property development.

Politicians in Northern Ireland have been concerned that commercial property prices there could be depressed further if Nama rapidly off-loads its Northern assets.



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