Lenihan ‘Very Confident’ of Winning Support for Bad Bank Bill

Ireland Finance Minister Brian Lenihan said he is “very confident” that legislation to create a bad bank to buy 90 billion euros ($132 billion) of assets from the country’s lenders will be approved by the Irish parliament.

“I am very confident,” that the plan will be passed, Lenihan, who will present draft legislation to parliament on the proposal tomorrow, said yesterday in an interview in Athlone, Ireland. “There has been a great discussion in government as there should be; our partners in government have raised various issues as they should. We have worked through those issues.”

The Irish government, battling the country’s worst-yet recession, wants to create the bad bank, known as the National Asset Management Agency, to buy assets in the wake of a property crash. Dan Boyle, the chairman of the Green Party, junior partner in a coalition government with Lenihan’s Fianna Fail party, said yesterday improvements to NAMA are needed to win his party’s support.

“The core principle of NAMA is that we need to cleanse the assets of the bad loans off the banks’ balance sheets and we need to replace it with bonds that can be readily traded for cash” Lenihan said. “If we don’t take that basic step, our banks are going to evolve into zombie banks” that will not support the economy, Lenihan said, adding he hoped to deal with all the valuations relating to NAMA in the first half of next year.

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net

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