Markets have indicated cautious optimism to the Government's decision to split Anglo Irish Bank.
The cost of borrowing has slipped below 6% as Wall Street bank Goldman Sachs described the plans for the Anglo as sensible.
However it warned there would be uncertainty until the final costs are produced by the Central Bank.
Minister for Finance Brian Lenihan has said that yesterday was not a 'silver bullet' in creating confidence in the banking industry, but the Government's proposals for Anglo Irish Bank should bring finality to the bank's problems.
Anglo is to be divided by the Government into a funding bank and an asset recovery bank.
The Government had rejected a plan from Anglo Irish Bank's management to split the bank into a good bank and bad bank, but decided on a variation of that proposal.
Current depositors will become customers of the funding bank, which will continue as a regulated bank.
It will also be able to take new deposits, but will not be giving out any loans.
The asset recovery bank will eventually be sold or partly sold or its assets will be run-off over a period of time.
Mike Aynsley CEO of Anglo Irish Bank has said that 'the market in Ireland is in the process of bottoming out. In some areas you could say that it probably has bottomed out, but the next few months will tell.'
Speaking on CNBC this morning, he said that while there is some confidence around the portfolio, part of it is up to the marketplace itself.
Speaking on RTÉ Radio, Mr Lenihan said that he would prefer to call the Anglo plans an 'orderly work out' rather than a wind-down, but added that the process would take a number of years.
The Minister said it was very important to give some certainty to the Anglo Irish Bank situation, adding that variable figures cannot continue to be given out.
He pointed out that Anglo has not increased its volume of lending since it was nationalised and the size of its balance sheet has shrunk and will continue to shrink.
He said in coming to yesterday's plan he had consulted with the European Commission and Central Bank Governor Professor Patrick Honohan, who was very strongly of the opinion that an orderly wind-down was the bank's best option.
The Minister also said the Government will produce definite figures on the cost of gradually winding down the nationalised bank before the start of October.
'We will deal with this matter in a matter of weeks and I believe taken together with the announcement on the guarantee of funding that the bond markets will wait weeks as well,' he added.
Mr Lenihan also said that he understood bidding for AIB's 70% stake in Polish lender Bank Zachodni had closed and that a number of substantial bids had been made.
Kenny criticises Government plan
Meanwhile, Fine Gael leader Enda Kenny has questioned the wisdom of the Government’s strategy on Anglo Irish Bank, claiming that there are now two State agencies winding down extensive property portfolios.
Mr Kenny said former National Treasury Management Agency boss Michael Somers had raised the issue in a private session with the party this morning and had pointed out that both NAMA and the Anglo entity being wound down would be engaged in the same task.
Speaking at the end of a special parliamentary party meeting outside Waterford, Mr Kenny said while he had supported Minister Lenihan’s fiscal strategy, he had been wrong throughout in his banking policy and should have moved to limit the guarantee rather than planning to renew it.
