Taoiseach Brian Cowen

Taoiseach Brain Cowen told the Dáil today the establishment of "bad bank" NAMA - - National Asset Management Agency - - is an “arduous and complex task” which is being “proceeded with as a priority”. He said it is likely that the Dáil will have to be recalled early in September to deal with the relevant legislation setting up NAMA.

Cowen said the question of valuation of impaired assets is part of a process to be employed by NAMA and that “process has just begun”. Cowen said the agency would apply European Union guidelines when deciding the value of the impaired assets and he told Labour Party leader Eamon Gilmore that the legislation was a priority for the Department of Finance, but it was a complicated issue. Asked if legislation would be ready before the summer recess, Cowen said it was more likely the House would have to be recalled in September to deal with it.

Earlier at Leaders’ Questions this morning, Fine Gael leader Enda Kenny asked the Taoiseach “clear up the element of confusion” surrounding the discount to be applied to the assets.

“What’s happening now is that the bank shares are beginning to climb and the country’s credit rating is continuing to decline and the reason for that is that the banks have been saying to their shareholders that the discount will be 20 per cent,"he said.

“This has truly massive implications to the tax-payer. Greens are saying 40 per cent, International financial houses after discussions with the Irish banks are saying 20 per cent,” Kenny added. “This only gives credence to the belief that what’s involved here is a massive bailout of banks at taxpayer’s expense."

Cowen said the Fine Gael leader had taken a “continually irresponsible approach” in relation to the bailout of the banking system.

He said the discount would depend on the “asset quality and a whole lot of other criteria” which will be decided by NAMA.