Our general criticisms of Nama's draft business plan are presented in Nama - A Flawed Business Plan.
This posting raises basic questions and concerns about the plan's underlying default rate and treatment of rolled up interest. These could have huge implications for the plan's credibility; the likely depth and duration of the banking/building crisis; and the cost of Nama to taxpayers.
In summary, detailed analysis of Nama's cashflow projections suggests that the "real" default rate is either an unrealistically low 6% or a catastrophically high 34% depending on the treatment of rolled up interest arising over the ten years to 2020. This compares with a 20% rate quoted in Nama's plan.
Instead of debating the Nama Bill, the Dail and Seanad should undertake a more indepth review of Nama's business plan. Bottom line: no taxpayers' money or support should be forthcoming until its plan has been fully researched and presented in final form for approval.
Our detailed assessment is presented in the five sections below. They review Nama's projections, highlight concerns, pose questions, explain implications and present general conclusions.