Taoiseach Brian Cowen has said he takes full responsiblity for decisions he made in the past that led to the economic crisis.
Mr Cowen was speaking following the publication of two reports into the banking crisis which sharply criticised the Government's fiscal policy, the system of regulation and the lending policies of the banks, which it said led to the crisis.
Mr Cowen said that the economic and banking collapse had left the country in a deeply challenging situation and he regretted that.
The two reports into the bank crisis are heavily critical of three main targets - Government economic policy, the financial regulation system, and the lending policies of Irish banks.
The report of Central Bank Governor Patrick Honohan says the system of regulation was characterised by excessive deference to the banks and timid responses when problems were found.
The Governor said inspections discovered numerous problems with the banks, but the regulator did not follow up with rigorous actions that could have headed off the banking crisis.
He said the collapse of Lehman Brothers did not cause the Irish banking crisis.
Bad lending choices and falling property values meant that at least two banks - Anglo Irish and Nationwide - were going to go bust anyway, while AIB and Bank of Ireland might just have traded through, if there had been no international credit crunch.
Mr Honohan said the decision to guarantee the banks' liabilities in September 2008 was justified, but should probably not have included subordinate bonds.
The Regling Watson report says the Government's fiscal policy increased the dangers to the economy of a crash in the property and banking sectors leading to a recession that was deeper and longer than necessary.
They say that by mid-decade, the financial and property boom in Ireland presented features in which financial stability analysis should have sounded alarm bells loudly.
It says domestic financial stability reporting by the central bank failed in this regard.
It noted worrying features; but it failed to trace their interactions vividly or to warn how severe were the emerging risks to bank soundness and, ultimately, to the living standards of the ordinary citizen.
However, the authors say external surveillance sources fared little better. The IMF's major Financial System Stability Assessment of 2006 did not sound the alarm, and there is no evidence that its private warnings did so either.
Reports 'vindicated' Govt approach - Cowen
Earlier, speaking at a news conference in Dublin, Mr Cowen insisted the reports vindicated the approach taken by the Government to deal with the crisis and confirmed the need for a bank guarantee scheme.
He referred to Governor Honohan's finding that the collapse of Anglo Irish Bank would have cost far more than the guarantee.
The Taoiseach said the reports also showed that the advice given by bodies such as the Central Bank and IMF before the crisis was that the banks had enough capital and that a soft landing in the property market was expected. He said he agreed that a more restrictive budgetary policy would have helped.
The Minister for Finance echoed those comments and emphasised that today's reports were preliminary, scoping reports, which will point the way to 'a more detailed examination' by a Commission of Investigation.
He said the commission would have a six month time limit to bring its work to the Government.
After draft terms of reference are agreed, the Minister said he will prepare a draft Government Order to establish a statutory Commission of Investigation.
Lessons to be learned - Dempsey
Minister for Transport Noel Dempsey has said there are lessons to be learned from the report and the Government is taking these lessons on board.
He said the Government was already moving to ‘rectify’ faults found.
The Minister said if ‘we knew then what we know now’ the Government would not have pursued policies they did at the time.
But he said ‘nobody’ in the political system was ‘calling for a halt’ and claimed the Opposition was calling for more Government spending in those times.
He said Government surpluses were used for a range of policies during the boom that were ‘important’ to people across the country.
He accepted there had been ‘some warnings’ and that ‘there were words of caution sounded’.
Dáil will not debate reports today
The two reports will not be debated in the Dáil chamber this afternoon.
The Government has ordered business for today and tomorrow to allow for statements and discussion of legislation, but no questions to ministers or the Taoiseach.
The House was due to be in recess this week, but is sitting to debate the implementation of the Ryan Report and a number of pieces of legislation.
However, the Government has introduced procedural rules which ban the usual ways for the Opposition to raise issues today and tomorrow - no orders of business, no questions, no private members time, no votes.