  We propose the development of a prediction market for forecasting prices for
"toxic assets" to be transferred from Irish banks to the National Asset
Management Agency (NAMA). Such a market allows market participants to assume a
stake in a security whose value is tied to a future event. We propose that
securities are created whose value hinges on the transfer amount paid for loans
from NAMA to a bank. In essence, bets are accepted on whether the price is
higher or lower than a certain quoted figure. The prices of the securities
represent transfer prices for toxic assets increases or decreases in line with
market opinion. Prediction markets offer a proven means of aggregating
distributed knowledge pertaining to fair market values in a scalable and
transparent manner. They are incentive compatible (i.e. induce truthful
reporting) and robust to strategic manipulation. We propose that a prediction
market is run in parallel with the pricing procedure recommended by the
European Commission. This procedure need not necessarily take heed of the
prediction markets view in all cases but it may offer guidance and a means of
anomaly detection. An online prediction market would offer everybody an
opportunity to "have their say" in an open and transparent manner.
