I think you're wrong here yoganmahew. I'm almost certain that the debt of semi-state and state sponsored bodies are not included in the national debt. This is the case even when the debt is backed by a state guarantee. This why people only talked about the national debt "effectively" being doubled with the nationalisation of Anglo. The nationalisation of Anglo did not change our "real" national debt.
I'm not convinced by your FSA example; I don't think that the debts of the FSA are included in the national debt figure. What is included is debts of the local authorities (which are unquestionably part of the government) TO the FSA.
You're right. But effectively the HFA lends to councils the money it raises, so a short-hand measurement for that amount is the amount of debt that the HFA has outstanding.
I also agree that semi-states don't count.
But banks appear to be different. The UK government has had to include the liabilities of Northern Rock in its GGD figures...
Surely, the ability of banks to buy government bonds has nothing to do with NAMA - it's to do with their capital ratios and how much the ECB will advance to them by repo against Irish government bonds. In which case they are really only acting as intermediaries between the government and the ECB as a lender and the government (through the NTMA) could use any bank in the EU to do this if Trichet has given his approval.
Yes, that is true, but with captive banks, the yield can be kept down. Can you see Deutsche bank buying Irish bonds at current market rates? Not without political pressure being brought to bear (as in, I'm a shareholder, bail me out of here...). There is also the point as to why they would want to when they have their own political pressures being brought to bear in their home states to do the same.
The point is not that NAMA facilitates this, but that NAMA stops the banks going bust. And therefore allows the majority buyers of Irish government debt to continue buying that debt.
As far as I know, there is no legal impediment to the treasury/finance dept of the ESB, for example, or other semi-states/nationalised body investing in government bonds.
No, there isn't. And I would expect to see their pension funds move to totally government debt basis, particularly now they are being taken into government management bit-by-bit. But this is spending with real money through the primary dealers. As the banks do. As your and my pension fund do.
The problem is that 21 bn is a lot of money. We've become desensitised to the amount it is. It ran the country for a year in 1998 (I think).
I'm yet to be convinced that this is relevant at all to whether NAMA is a good idea or not. Particularly given the two glaring non-sequiturs in the implied chain of reasoning: if NAMA is set up, the banks can remain private (arguable), if the banks remain private then they can help fund the government deficit (very arguable), thus NAMA is a good thing because it will allow the banks to buy government bonds.
As I say, NAMA is a side-show. The real event is whether the government will go bust. NAMA reduces the likelihood of this by increasing the likelihood that the banks will survive.