The Commission of Investigation into IBRC has said it "is unable to proceed with its investigation".
It said that KPMG, the special liquidators of the bank, have claimed legal privilege over relevant documentation.
The commission, headed up by Judge Brian Cregan, said this matter can only be resolved by "legislative change or by a waiver of the privilege by the special liquidators".
In order to overcome issues of privilege, it recommends that legislative changes or the Special Liquidator of IBRC waiving their rights of privilege.
Today the interim report of the Commission was published.
The Commission has also recommended legislative changes to deal with confidentially issues, the appointment of more members to the commission and permission for it to investigate the 12 largest transactions first.
The largest six transactions involve write-offs greater than €100m and the next six involve write-offs greater than €50m.
It said the combined total write-offs of these transactions is €1.3bn which represents 68% of all write-downs associated with the total number of transactions being investigated which is 38.
It states that if one or more members were appointed to the commission, these 12 investigations would be completed within 18 months to two years - after the legal obstacles have been resolved.
The Commission estimates that investigating all 38 transactions would take several years and result in substantial costs and it has requested a revision of the time frame.
Meanwhile, it said that it has not been able to overcome secrecy legislation which covers Central Bank documentation.
The report said: "It does not appear to the Commission that a simple amendment to domestic law would be likely to overcome the problem of obtaining information from the Central Bank."
The Commission which is also tasked with investigating unusual share trading involving the transactions activity but said it is unable to obtain relevant information from the Stock exchange without legislative change.
The Commission also recommends some changes to the terms of reference to clarify certain matters including a clarification that it is not required to investigate any aspect of the business of Irish Nationwide building society prior to its merger with Anglo Irish Bank.
It also notes that Siteserv, which was sold to a Denis O'Brien controlled company, is one of the transactions being investigated and was dissolved in August 2015.
The Commission says if it is to investigate any transaction involving Siteserv, then the company has to be restored to the Register of companies.
The interim report states that the liquidator of Siteserv has indicated his willingness to do this by applying to the High Court.
Fianna Fáil Spokesperson for Finance Michael McGrath commented: "When the story of difficulties in the work of the Commission first came into the public domain two weeks ago, it was suggested that emergency legislation would be brought forward 'within days' to allow disclosure of documents to be compelled in the public interest.
"The report states in stark terms that 'the Commission is unable to proceed with its investigation without legislative change'.
"It is now clear that the Government have made a shambles of the process of investigating legitimate concerns regarding the loss incurred by the State on the Siteserv sale and other IBRC transactions.
“It initially set up a flawed investigation process using KPMG, despite that firm having acted as advisers on the Siteserv deal.
“Having appointed a High Court judge in a supervisory role to attempt to deal with the obvious conflict of interest, it was forced to do another U-turn and eventually established a full Commission of Investigation. Now it appears that the Commission itself is going nowhere," Mr McGrath added.
