On 26 February 2010, the European Commission announced its decision to approve the establishment of the National Assets Management Agency (NAMA). NAMA was approved pursuant to Article 107(3)(b) of the Treaty on the Functioning of the European Union, which allows approval for "aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State".
NAMA is intended to restore stability to the Irish banking system by allowing participating institutions (Anglo Irish Bank, Allied Irish Bank, Bank of Ireland, Irish Nationwide Building Society and Educational Building Society) to sell their impaired assets to NAMA, thus allowing for a return to a normal functioning financial market. NAMA's objective is to manage the assets expeditiously with a view to maximising their value and recovery prospects in the interest of the State.
The Commission's approval concerns the NAMA scheme only. The Commission will assess the compatibility (and, in particular, the actual transfer price) of the transferred assets when they are separately notified by the Irish authorities. These individual reviews will include a claw back mechanism in case of excess payments.
The Commission has noted its reliance on commitments from Irish authorities to ensure that NAMA, whilst maximising the recovery value of the purchased assets, does not lead to distortions of competition through the use of some of the specific powers, rights and exemptions granted in the NAMA Act. The Commission will also review the restructuring plans of each institutions involved to ensure that their participation in NAMA is followed up with appropriate restructuring measures to promote the return of those institutions to long term viability.