November 2011 Archives

Over the past year, I have expressed deep concern about Nama's accounting methods to Nama's chairman and board, EU Commissioners and the Minister for Finance in a series of letters - see Nama and Creative Accounting for details.

My complaint is that Nama is using an accounting method which effectively "buries" the losses incurred (aka the "discount") on loans acquired from the covered banks.

The furore over the recent "discovery" of €3.6 billion in the national accounts is nothing compared with the "disappearance", I reckon, of about €50 billion (i.e. €50,000,000,000) within Nama's accounts. I understand that the Comptroller and Auditor General is considering the inclusion of this "loss" in Nama's accounts in some shape or fashion.

Against this background, I wrote to the C&AG on 1st November and suggested that, in the interest of openness and transparency, his office should consider producing "shadow" pro-forma annual accounts for Nama showing its acquired loans at par value and indicating the full extent of loan and interest write downs/offs. Here is a copy of my letter to the Comptroller and Auditor General

This proposal would help identify the full extent of the developers' bailout and losses incurred by the covered banks during the bubble years.

Nama's "forgive and forget" approach can be contrasted to the Government's treatment of mortgage holders who through unemployment etc. cannot meet repayments - see Debt Forgiveness Discrimination.


Having reviewed the full transcript of a meeting of the Dail's Public Accounts Committee with Nama and the C&AG on 26th October 2011, I have written directly to the PAC drawing attention to my letter to the C&AG and related correspondence. This was published at the PAC's meeting on 1st December and forwarded to the Department of Finance and Nama for comment.

Ministerial Pensions are a Gravy Train

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Former ministers will receive annual pensions averaging €81,000 and costing €8.8 million a year. This could amount to €80 million over the next decade and must be funded by new borrowings and additional taxation to cover interest charges and eventual repayments.

In accepting these pensions, do these former ministers not realise that the State is effectively bankrupt thanks, in some cases, to their mismanagement and incompetence?

Letter published in the Irish Times on 11th November 2011.

Bank Inquiry Snookered?

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May I congratulate the "establishment" on its scare-mongering, self-serving campaign to ensure that the banking crisis which brought the country to its knees is unlikely to ever be the subject of an in depth public inquiry by our elected representatives.

Letter published in the Irish Times on 2nd November 2011.

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