There is much contradictory and very confusing comment on what the facts really are concerning NAMA. Here we list and link to a number of sources that readers may find of help as they try to discover the facts about NAMA.
Professor Karl Whelan, on The Irish Economy blog (access here), has listed six core facts. These are:
- NAMA will purchase loans from the banks with bonds backed by the Irish taxpayer.
- The Irish government, in the form of NAMA, will be paying interest on these bonds to the Irish banks at an initial rate of approximately 1.5 pecent.
- The ECB is not lending NAMA money at 1.5 percent.
- The ECB is not lending NAMA money at all as to do so would violate the EU Treaty’s prohibition of monetary financing of government.
- The ECB’s current operating rules mean that it will lend to any bank that has eligible collateral and government-backed bonds are eligible collateral
- The taxpayer is contributing the money to pay for the NAMA assets because the taxpayer will have to pay the interest and the principle on these bonds.
Wikipedia has an interesting and fairly understandable item which seeks to address what the facts about NAMA are. It can be accessed here. The first two sections are as follows:
As a result of the collapse of the Irish property market, Irish banks have property development loan assets secured on property with a market value significantly below the amount owed. Many of the loans are now non-performing due to debtors experiencing acute financial difficulties. Both factors have led to a sharp drop in the value of these loan assets.
If the banks were to recognise the true value of these loans on their balance sheets, they would no longer meet their statutory capital requirements. The banks therefore need to raise further capital but, given the uncertainty around the true value of their assets, their stock is in too little demand for a general share issuance to be a viable option.
The banks are also suffering a liquidity crisis due, in part, to their lack of suitable collateral for European Central Bank repo loans. Along with their capital requirement problems, this is limiting the banks' ability to offer credit to their customers and, in turn, contributing to the lack of growth in the Irish economy.
How NAMA will work
The National Asset Management Agency Bill 2009, in its present format, covers the six financial institutions which are covered by the Irish government's deposit guarantee scheme. Those institutions are Bank of Ireland, Allied Irish Banks, Anglo Irish Bank, EBS, Irish Life and Permanent and Irish Nationwide. Other institutions (such as Ulster Bank) which are not covered may choose to join the scheme.
The Minister for Finance, Brian Lenihan, said the banks would have to assume significant losses when the loans, largely made to property developers, are removed from their books. If such losses resulted in the banks needing more capital, then the government would insist on taking an equity stake in the lenders. Economist Peter Bacon, who was appointed by the government to advise on solutions to the banking crisis, said the new agency had potential to bring a better economic solution to the banking crisis and was preferable to nationalising the banks.
The assets will be purchased by using government bonds, which may lead to a significant increase in Ireland's gross national debt.
The Bill provides that NAMA will be established on a statutory basis, as a separate body corporate with its own Board appointed by the Minister for Finance and with management services provided by the National Treasury Management Agency. 
The Bill envisages that NAMA will arrange and supervise the identification and valuation of property-backed loans on the books of qualifying financial institutions in Ireland, but will delegate the purchase and management of these loans to a separately created Special Purpose Vehicle (SPV).