The Minister for Finance has admitted that there will be huge practical difficulties in the establishment of the National Asset Management Agency to deal with toxic debt.
Brian Lenihan was speaking in London where he has been briefing city investors on the measures the Government has been taking to stabilise the economy.
The Government has yet to introduce the legislation to establish NAMA, but yesterday the man charged with running it, Dr Michael Somers, expressed reservations about its operation.
The Minister appeared today to echo those reservations, saying there would be huge practical difficulties in the areas of law, staffing and valuation.
It is not yet clear how many loans will continue to be managed by the banks themselves or handed over to NAMA.
It is also anticipated there will be legal action from some of the developers who took out the loans.
Mr Lenihan told RTÉ it was important to get the establishment of NAMA right and that was why the Government was not going to rush it.
He said the legal challenges would have to be met and the valuations would have to be realistic.
Mr Lenihan said orderly change had to take place in the banking system within a realistic timeframe.
He added that that the Government would have to force the banks to take their losses now because if they attempted to trade their way through the recession, it would inflict further damage on the economy.
The Minister had similar meetings in Paris yesterday.
He said investors had given a very positive response to the steps the Government was taking to correct imbalances in the economy.
However, he admitted that credit rating agencies had been tough on Ireland and that was why it was important to go out and sell Ireland.
