Tag Archives: liquidity

How do we solve a problem like Mario?

Has the European Central Bank gone feral? If it has this is an appalling vista, and with which must be dealt with. But its not clear how.

Continue reading

Minister says NAMA can continue to operate even if balance sheet-insolvent

Bankruptcy is no bar to NAMA it seems, as the minister suggests that solvency = liquidity. Hmmm… that sounds awfully like what we heard re banks in 2008…

NAMA Wine Lake

It seems to be a moot point for the time being given that NAMA is saying it will make a profit of €200m in 2011, but Minister for Finance, Michael Noonan last week said in a reply to a parliamentary question that NAMA does not have any minimum capital requirements and can accordingly continue to operate even if balance sheet-insolvent.

So what is “balance sheet-insolvent”? This is where a company’s assets are worth less than its liabilities. For example, Independent News and Media – the loss-making media group that Denis O’Brien and the O’Reilly family are scrapping over – recently reported its preliminary 2011 financial results and said that its assets came to €573.7m, its liabilities to €596.5m and the company therefore had €22.8m of net liabilities. It is balance sheet-insolvent. Now this is not to suggest that IN&M can’t pay its bills as they fall due, it seems to…

View original post 454 more words