NAMA’s Bogus De-Leveraging

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The following will tend to make you very upset.

David R writes:

This article (below) from Bloomberg earlier today is about vendor-financed deals. It basically explains that a lot of the medium-quality assets on banks’ books are being sold to other firms but since the other firms are finding it hard to get outside credit, the banks are essentially lending money to them to buy the assets off the same banks, meaning that the risk is essentially just shifted back to the banks’ balance sheet, thereby only really succeeding in taking off a tiny amount of the total risk.

Anyway, there was one interesting bit in it about NAMA that I hadn’t heard before:

“The National Asset Management Agency, set up to purge Irish banks of risky property loans, said it will also provide as much as 70 percent of financing to help sell commercial assets.”

Can this possibly be true?

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European Banks Get ‘False Deleveraging’ in Seller-Financed Deals (Bloomberg)

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