The Taoiseach has told the Dáil that recapitalisation of the banks alone will not solve the issue of access to credit for small businesses.
He was speaking as the share price of a second Irish bank fell below the €1 mark and the Dublin stock market hit a new 12-year low.
During leaders' questions, he said the Government was looking at range of measures to remedy the liquidity problem but he said he was constrained in revealing what they were.
He said that under the bank guarantee scheme, all covered banks were drawing up business plans and this process was at an advanced stage. He said the Government would make more decisions when it had this information.
The Taoiseach said the Government stood ready to make decisions that would help the economy and Irish business.
Mr Cowen said that if these plans did not contain measures to provide adequate lines of credit to businesses, they would be rejected. He also said the Governor of the Central Bank and the Minister for Finance had met this afternoon.
Labour leader Eamon Gilmore said the Government sounded like helpless bystanders. Fine Gael leader Enda Kenny demanded that the banks be recapitalised, as he said 10,000 jobs were being lost every month as small businesses were squeezed.
Meanwhile, shares in a second Irish bank, Anglo Irish, fell below €1 as international investors continued to sell stock in Irish financial institutions. Shares in Anglo Irish Bank lost 25% to end at 83 cent.
Shares in Bank of Ireland rose today but still remained below €1, while AIB fell almost 18%. The ISEQ index fell almost 5% to 2,450 - its lowest level since July 1996.
The Financial Regulator has received a draft report from consultants PricewaterhouseCoopers on the banks. On Thursday it will receive the business plans from the financial institutions.
Meanwhile, Irish banks will be part of a UK revenue investigation of offshore tax evasion, under which foreign owned banks and building societies with UK operations will be asked to disclose details of British residents with foreign accounts.
It is expected that the investigation will raise millions of pounds hidden by wealthy individuals from the UK exchequer. The investigation will be accompanied by the offer of an amnesty.
In the next few weeks the 25 banks and building societies will receive legal notices ordering them to give details of British residents with foreign accounts.
A spokesperson for HM Revenue and Customs said she couldn't comment on when individual banks would be contacted.
She said: "We will be working with every bank with a UK presence at some stage. The Irish-owned banks may not be in this part of the investigation." AIB said it would not comment on the report.
