Financial Regulator Matthew Elderfield has told a Dáil committee that the Government could enter negotiations with senior bondholders to share some of the cost of the bank bailout.
Mr Elderfield told the Economic Regulatory Affairs Committee his office will intervene with financial institutions which are not managing risk adequately.
Mr Elderfield said financial institutions would have to broaden their lending capabilities as they were too concentrated on mortgages in the past.
He said the Regulator would be given new powers, which would allow it to take control of an institution and pursue resolution proceedings that would avoid the need for taxpayer money being pumped into the banks.
He said he supported the Government's position of making certain subordinated bondholders shoulder some of the costs of the bank bailout, Mr Elderfield said.
He told the committee that his office had written to gardaí in relation to certain issues around Anglo Irish Bank.
He said he was waiting to see if they would be pursued.
The Regulator called for tougher higher-level laws to take criminal action against individuals.
He said there was a need to rebalance the enforcement laws as there were too many small offences for which action could be taken and it was resulting in time wasting for gardaí and his office.
Mr Elderfield agreed that there was a need for better protections for whistleblowers.
He issued an apology to AIB whistleblower Eugene McErlaine whose case he said could have been handled better by the authorities.
The Regulator said his staff was two-thirds understaffed but said his office was continuing to recruit further staff.