The Central Bank has welcomed the agreement between the Government, the EU and International Monetary Fund and confirmed new tougher financial targets for the banks.
Governor Patrick Honohan said the funding made available meant that Ireland's budgetary and banking policies could now be fully implemented, and that market confidence would return.
He also said the programme provided the necessary assurance to achieve a 'convincing and rapid reconfiguration and downsizing' of the Irish banking system.
Head of financial regulation Matthew Elderfield said the measures would provide an 'immediate and significant' strengthening of the Irish banking sector's financial position.
The Central Bank has also set new financial targets for the banks to reach by early next year. It said AIB, Bank of Ireland, Irish Life & Permanent and EBS would have to have core tier one capital ratio of 12%. This is the amount of funding the banks must hold in reserve to cope with potential future loan losses. The banks must meet this target by February 28 next year, though IL&P will be given until the end of May.
Under the Central Bank's target, AIB will now need another €5.3 billion, bringing the total it needs to raise to almost €10 billion. Bank of Ireland will need another €2.2 billion, EBS €438m and IL&P €98m.
The Central Bank said this would involve an extra injection of €10 billion into the banking system. The banks will go through a 'stress test' in March, and further money will be injected if their capital ratio falls below 10.5%.
The four banks will also have to have detailed plans for the sale of assets by the end of April.
On Anglo Irish Bank and Irish Nationwide, the statement said their restructuring would be 'swiftly completed' by the Department of Finance with the support of the Central Bank and submitted for EU State aid approval.
Bank of Ireland said it intended to try to raise the additional money through a combination of 'internal capital management initiatives, support from existing shareholders and other capital markets sources'. It added that the Government would inject the remaining amount, if the bank could not meet the target.
