The Great Debate UK
Most buyers are happy if their putative purchase gets cheaper. However, Dublin's government is watching the on-off liquidation of developer Liam Carroll's assets with trepidation.
Dublin has committed to acquiring property loans with a face value of some 90 billion euros from the country's beleaguered banks at a so-far unspecified discount to establish a "bad bank". The idea is that by removing such loans to the new National Asset Management Agency (NAMA), the banks would be free to start lending again.
In principle, you might think that ministers would want that discount to be as fat as possible. A fire sale of the property assets of one of Ireland's biggest developers should show just how far prices have really fallen.
However, opposition politicians believe that the government wants to overpay for the loans. They have fixed on finance minister Brian Lenihan's promise that the state would pay the "long term economic value" rather than today's depressed market price of the underlying loans.
Three months is a long time in the markets, and particularly for banks. Alongside the rally in bank shares, investors have also bid up bank bonds, especially so-called tier 1 bonds which rank just above the equity in the list of creditors.
Eugene Sheehy told investors last October that he’d rather die than raise equity. Luckily the Allied Irish Banks boss, who has announced his imminent “retirement”, won’t have to make good on that pledge.