The Irish National Asset Management Agency (NAMA) is a first for Ireland, but not for a range of countries around the world. The results of such interventions are mixed, but broadly positive. The political ideology of the country has also been no bar to massive state involvement in banks, with even the United States prepared to liquidate and own assets previously held by private corporations and banks. Below is a brief description of where asset-management operations and 'bad banks' have been used before.

The United States

The Resolution Trust Corporation was set up in 1989 to liquidate assets that previously belonged to the savings and loan associations, known as thrifts. Overall, the cost of this intervention to the American taxpayer was $124bn, although the cost was reduced somewhat by getting private-sector involvement.

The scheme also involved companies bidding for some of the assets. Like NAMA, the assets were primarily real estate loans and mortgages. The assets were sold off as "equity partnerships" and by retaining an interest in these vehicles, the US taxpayer was able to benefit from the subsequent upside.

Sweden

Two asset-management corporations were set up in 1992/93. Assets of ailing banks were split into "good" and "bad" assets, with the bad assets then transferred to the two asset-management corporations, with most going to a vehicle known as Securum.

The cost to the Swedish taxpayer was greatly reduced by the value eventually secured for the assets. The Swedes used a valuation board, filled with property experts, to put a value on the assets. But the Swedes were taking their actions at a time when the world economy was in far better shape than it is now.

France

In the 1990s, the French set up a state body to liquidate certain assets of the bank Credit Lyonnais. The assets, however, were transfered into the new vehicle at their book value, rather than having to take any haircuts, which was a bonus for the bank's shareholders.

Italy

Banco di Napoli in the 1990s was again split into a bad and good bank after existing shareholders were forced to absorb some early losses. The Italian government also re-capitalised the bank to keep it afloat. The clean bank was privatised one year later.

Switzerland

The government has created a new fund to which UBS has transferred a portfolio of toxic assets that were valued by a third party prior to the transfer. To ensure financing of this fund, Switzerland first injected capital into UBS, which UBS immediately wrote off and transferred to the fund. The remainder of the financing of the fund was ensured by a loan from the Swiss National Bank.

Czech Republic

The banks in the Czech Republic got into trouble in the early 1990s and a bad bank, called Konsolidacni Banka, was set up to take on bad loans accumulated before 1991. The agency also took on some fraudulent loans from the Soviet era. Essentially, the Czech authorities replaced bad assets with fresh funds. The authorities set particular criteria to be used to get access to the programme. Some of the country's banks failed to comply with the requirements and were simply allowed to go out of business. Effectively, the Czech authorities bought the assets from the banks by providing liquidity and then made the banks re-purchase the loans, at least in part, five to seven years later.

Germany

WestLB is a recent case of where the German authorities got involved in trying to detox certain loans. In this case, a €23bn portfolio of loans was channelled into a special-purpose vehicle and given a government guarantee to cover eventual losses. This allowed WestLB to remove
the market volatility of the assets from its balance sheet. The German authorities, led by chancellor Angela Merkel, will be paid a guarantee fee of 0.5%. The guarantee remains in place and is officially categorised as a form of state aid.