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Paper eres2014_205:
The Role of Bad Banks in Real Estate Asset Repositioning and Price Discovery – A case study of The National Asset Management Agency (NAMA)

id eres2014_205
authors D'Arcy, Eamonn; Sotiris Tsolacos
year 2014
title The Role of Bad Banks in Real Estate Asset Repositioning and Price Discovery – A case study of The National Asset Management Agency (NAMA)
source 21st Annual European Real Estate Society Conference in Bucharest, Romania
summary One of the many lessons to be learned from the recent global financial crises (GFC) relates to the damage done to the functioning of national banking systems by non-performing real estate loans both residential and commercial. In the European context the experience of banks in Cyprus, Ireland, Spain and the United Kingdom provide many cases in point. From a real estate perspective the market consequences of such loans in terms of depressing market activity and postponing recovery are very significant. As a consequence the need to both recapitalise banking systems and to stimulate real estate market recovery becomes a primary concern for policy makers. This paper explores one solution to this twin problem through a case study of the Irish Governments ‘toxic’ property bank – The National Asset Management Agency (NAMA). Since its inception in 2009 NAMA has been used initially as a vehicle to recapitalise the Irish banks through the removal of in excess of 70 billion euros of non-performing real estate loans from their balance sheets and more recently as a key stimulus to real estate market recovery through a range of asset repositioning activities. In particular these activities have facilitated price discovery and brought considerable transparency to the inherent risks in the assets involved. The papers concludes by assessing the viability of the NAMA model, its principal real estate market and portfolio implications and at a wider level its key policy insights for other attempts to deliver similar outcomes such as the recent creation of a bad real estate bank in Spain.
series ERES:conference
email p.e.darcy@reading.ac.uk
more http://library.eres.org/cgi-bin/rsa98.pl?conf=ERES2014&type=session&theme=E &slot=2710
discussion No discussions. Post discussion ...
ratings
session E : International Real Estate
last changed 2014/10/21 21:51
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