Up to 25 bank directors will be forced out under the NAMA deal.
The Cabinet yesterday signed off on the latest draft of the laws to bring in the Government’s ‘bad bank’.
Ministers agreed on a way of sharing the risk between the banks and the taxpayer.
It includes a form of delayed payment to the institutions for their toxic loans. In a significant departure, Fianna Fail last night allowed the Greens to take credit for the changes to the NAMA bill.
Part of the package of measures to reassure the public is the removal of the remaining directors from bank boards, as revealed in the Irish Independent yesterday. The Greens’ demand on the introduction of new bank board’s was agreed in principle by ministers, but precisely how it will be done has still to be worked out. Communications Minister Eamon Ryan stressed that the removal of the directors would be “an orderly changeover” over the course of two years.
All non-executive directors of the banks participating in NAMA will, if appointed prior to 2008, be required to step down. That will affect up to 25 bank directors in AIB, Bank of Ireland, EBS, Irish Nationwide and Anglo Irish Bank.
Irish Life and Permanent directors will not have to resign as it is highly unlikely to apply to be covered by NAMA.
Mr Ryan indicated the Greens pushed hard with their Fianna Fail counterparts to get their proposals included.
And he hinted that his party will play a greater part in the broader development of government policy from now on.
A large number of directors of the banks have remained in place since the crisis began last September, at the time of state bank guarantee.
Many of the non-executive directors command in excess of €100,000 for sitting on the board.
The Greens are also claiming credit for a windfall tax of 80pc, on profits gained from increases in land value due to re-zoning decisions, to discourage property speculation.
The party is also saying it is responsible for linking planning changes into the NAMA process and bringing in new rules governing corporate practice in the banks. The junior coalition partners were allowed, by Fianna Fail, to announce the changes. The party has a meeting with its grassroots members at the weekend to discuss the NAMA legislation.
The Greens being giving a free run is a sign Taoiseach Brian Cowen is conscious of the need to keep his partners onside to prevent the Government from collapsing.
The Greens’ ministers will offer the cull of directors, the reassurances to the taxpayer and the planning changes as a sweetener to members to back NAMA. The second draft of the NAMA legislation will be published today.
Officials are still working on rules to force the banks to lend money to businesses after NAMA takes the toxic development loans off their books.
Meanwhile, Fine Gael called on the Government to publish the “NAMA 1,500” — the people that will be beneficiaries of the NAMA plan, so the taxpayer can see who is being bailed out.
FG finance spokesman Richard Bruton said at its core NAMA is a “secretive, tax-funded, politically directed work-out process for 1,500 of the most powerful, well connected business people in Ireland“.
The IBOA also has called for sweeping changes to the make-up of bank boards as the finance union give a conditional support for the Government’s ‘bad bank’ plan.
– Fionnan Sheahan and Joe Brennan