A former Chief Executive of Bank of Ireland has expressed concern about how the Government’s bank rescue body will function.

Michael Soden says banks face “a real dilemma” on future lending policies once NAMA pays over the 54 billion euro for their property and development loan books.

The bill establishing NAMA was passed by the Oireachtas on Thursday.

Speaking today Mr. Soden said: “Can you imagine, during the good times you’re accused of being reckless in your lending and have the chance of losing your jobs and now you’re faced with the situation where there’s a downturn in the economy you’re turning around and saying to the credit officers – who did lend in the good times, got it wrong – and now you’re saying we want you to lend money in the bad times and we don’t know if your going to get your money back.  This is a real dilemma.”

Mr. Soden added: “There’s 54 billion that will be spread around between the banks, but in the context of having that great sum of money, you’re not going to leave it in cash so initially you invest it for a period of time but you should be parceling it out to the specific areas [of the economy] that have been identified for need.”