Minister for Finance Brian Lenihan announced plans to create an asset management company to buy impaired property and development loans from six Irish financial institutions.
The asset management company will be called the National Asset Management Agency (NAMA) and will be set up to buy the loans and the properties securing them at a discount. The NAMA will be run under the control of the National Treasury Management Agency.
This move that could at least double the national debt and lead to greater State ownership of the banks. For example, if the Government pays a 40 per cent discount to buy bank loans of €90 billion, it would purchase the assets for €54 billion, doubling the national debt to €108 billion.