Would you work for Ireland's new "bad bank"?

The formation of a "bad bank" for domestic institutions' floundering loan books following yesterday's emergency budget could actually create some job opportunities for those brave enough to apply.

The government has taken a fairly bold decision of creating a National Asset Management Agency (NAMA) operating under the National Treasury Management Agency, which will take-over an estimated €80-90bn of impaired property and development loans extended by Irish banks.

With this comes a revised role for the Central Bank of Ireland, which will "place it at the centre of financial supervision and financial stability oversight".

Brian Lenihan, minister for finance, said in his speech:

These important structural changes will be complemented by significant new resources and additional expert staff, to widen skill sets and enhance market-based knowledge.

But a joint research note produced by Davy, NCB and Goodbody analysts debating the merits of creating a bad bank prior to the budget suggests attracting staff to it could be a challenge:

While it would staffed with professionals from the property/investment and corporate finance sectors, one would also need to take people from the banks themselves who are familiar with the clients concerned, though not necessarily the people who initially granted the loans. Getting them to join a venture whose mission is to make itself redundant as quickly as possible would be no easy task.

The NAMA has (rather obviously) been welcomed by Ireland's big banks, but it seems Moody's has yet to be convinced of the effectiveness of the move.