NAMA has begun the process of buying toxic debt from our ailing financial institutions. The first tranche sees €16 billion in loans being bought for a price of €8.3 billion – a ‘haircut’ of 47%. This €8.3 billion is being borrowed to finance these purchases. In essence, public debt is being created to buy private debt which may or may not be paid back.
Three years ago the amount of money being borrowed by Johnny Ronan, Liam Carroll, Bernard McNamara and their ilk had no effect on the ‘man on the street’. With NAMA buying the loans issued to these developers with public debt it is not only Johnny Ronan who is taking a kick in the groin.Tweet