The Anglo-Irish Bank has already been nationalised.  There is general acceptance that the big two - AIB and Bank of Ireland - are technically insolvent. If Nama only pays them "market rates" for their loan portfolio they will go bust unless their is a massive injection of public funds.  The Government proposal (at present) is to pay "long term economic value" - i.e. above current market rates for the loan portfolio - which is a nonsensical economic concept which implies that current market prices are unreal and that previous bubble prices can be recovered.  In reality it is just a hidden way of subventing the banks.

The Labour party argue, therefore, that we might as well nationalise the banks now in the first place.  

My problem is that even nationalisation requires the taxpayer to take ownership of the toxic debts.  Why not leave the risk investors - shareholders and and bondholders - to take the hit they accepted when they made their risk investment - and focus on rescuing a functioning ongoing banking system from a receivership/examinership process.

I.e. let the banks go bust, and buy the viable ongoing parts of the business from the receiver leaving him to administer the toxic assets on behalf of shareholders/bondholders.

notes from no w here