Taoiseach Enda Kenny addressed the fallout from his comments during yesterday's panel discussion at the World Economic Forum.
Mr Kenny told the forum that Irish people went mad borrowing in a system that spawned greed, and that this led to the crash of the Irish economy.
In an interview carried on TV3 News, he said: "When I was at home I made it clear in my state of the nation address to the people that it was not the people's fault.
"Yesterday, in a panel discussion with the Danish and Finnish Prime Ministers, I set in context what happened in Ireland.
"We had very poor regulation, incompetent Government. We had a system in the banking regime that paid big bonuses on volume lending, which meant that developers in the sense of buying and proposing schemes that could never be paid by people brought our country over the edge. I set that in context very clearly."
Mr Kenny added: "That means that situation that my Government inherited was unprecedented, which means you've got to balance a programme of austerity with a programme of initiative and growth, which the Government is doing within the constraints that are imposed on us by the memorandum of understanding by the troika."
Earlier today, opposition parties and social commentators voiced their concerns of the remarks made by Mr Kenny.
Fr Seán Healy of Social Justice Ireland said the Taoiseach's remarks were "amazing and extraordinarily lopsided".
He said Mr Kenny failed to recognise that the generous bank guarantee and subsequent socialising of the debt lie at the root of Ireland's problems.
Fianna Fáil TD Niall Collins said there was a stark contrast between the Taoiseach's comments in Davos and his televised address to the nation last month, in which he told the public that the crisis was not their fault.
He said the Taoiseach is clearly taking one approach at home and another one abroad.
Fianna Fáil TD John McGuinness said Mr Kenny's remarks damaged his message and his own credibility.
Sinn Féin's Pádraig Mac Lochlainn said the comments were an appallingly ignorant synopsis of the crisis, which he said fell into the usual clichéd response offered by those who want to protect the economic status quo.
Speaking on RTÉ’s Morning Ireland, Fine Gael TD Damien English defended the Taoiseach, saying he was not being offensive in his remarks and the opposition was trying to make something out of them.
The Minister for Jobs, Enterprise and Innovation also defended Mr Kenny's comments.
Speaking on the Pat Kenny show on RTÉ Radio, Richard Bruton said the Taoiseach had outlined where exactly the blame for the crisis lay.