The Irish National Asset Management Agency - A Case Study on the Bad Bankk Option

Abstract

This article considers the Irish National Asset Management Agency established under the Act of the same name (2009) as a case study which raises interesting questions about how taking the option of creating a 'bad bank' has worked in practice in the current economic context. This article focuses specifically on more recent times as the original state rescue of the Irish banking sector stabilises. The creation of NAMA will be considered against a number of criteria which are often used as analytical tools, particularly in a law and economics analysis of legal events and regulation. The selected criteria include the question of whether appropriate monitoring and oversight of the Agency was put in place to begin with, so that agency problems could be addressed effectively. A second criteria is a consideration of the scale of market intervention involved in the creation of NAMA. Third, the opportunities for rent-seeking i.e. the extraction of fees and payments by those engaging with NAMA will be considered. Finally, allegations of problems which are more egregious that these first three will also be considered.