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NAMA Bonds Question

  • 30-07-2009 9:38pm
    #1
    alan4cult
    Registered Users, Registered Users 2 Posts: 1,583 ✭✭✭


    Ok this may seem like a stupid question but when NAMA take control of the toxic assets and loans why do they give the banks Government Bonds? Why not give them just straight cash? Sorry if I sound too simple!


Comments

  • #2
    [Deleted User]
    Posts: 5,589 ✭✭✭ [Deleted User]


    A government bond is essentially cash. They are tradable and transparent, and you also earn an interest rate on them.


  • #3
    Hasschu
    Registered Users, Registered Users 2 Posts: 411 ✭✭Hasschu


    Issuing gov't backed bonds to fund NAMA is a stroke of genius. When the gov't goes bankrupt which is now not beyond the bounds of probability, then they will default on the bonds and the taxpayers will be off the hook. We will have bigger problems when that happens but at least the collapse is another year down the road.


  • #4
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Hasschu wrote: »
    We will have bigger problems when that happens but at least the collapse is another year down the road.
    How are you sure it will take at least a year?


  • #5
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    NTMA is fairly liquid right now , IMF intervention could realistically only happen were they not . They have €20bn or north of that right now!


  • #6
    Hasschu
    Registered Users, Registered Users 2 Posts: 411 ✭✭Hasschu


    How do I know it will take a year? I do not know, I am assuming that Cowen, Lenihan and the gang have sounded out the bond markets and have determined that there is an appetite for risk amongst buyers at an interest rate that will not bankrupt the country in less than a year. We can only imagine the tales of woe, weeping and gnashing of teeth that the Taoiseach and TDs have to contend with. A years reprieve will be a great solace to them.


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