Finance Minister Brian Lenihan has said that yesterday was not a 'silver bullet' in creating confidence in the banking industry, but said the Government's proposals for Anglo Irish Bank should bring finality to the bank's problems.
Yesterday, the Government rejected Anglo Irish Bank management's plan to split the bank into a good bank and bad bank, but decided on a variation of that proposal.
The Government is to divide Anglo into a funding bank and an asset recovery bank. 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.
Speaking on Morning Ireland, 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 can't 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 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.
Meanwhile, the CEO of Anglo Irish Bank, Mike Aynsley has said that the next few months will tell if the market here is bottoming out.
Speaking on CNBC TV this morning, he said that while there is some confidence around the portfolio, part of it is up to the marketplace itself.
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.
Fine Gael leader Enda Kenny has questioned the wisdom of the Government's Anglo Irish Bank strategy, claiming that there are now two state agencies winding down extensive property portfolios.
Mr Kenny said former NTMA 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 that while he had supported Brian Lenihan's budgetary strategy, the Minister had been wrong throughout in his banking policy.
The Green Party's spokesperson on Finance Dan Boyle has said that the wind-down of part of Anglo Irish Bank is likely to take closer to five years than 15 years.
In a posting on the social networking site Facebook, Senator Boyle said most of the winding down process would take place in the early years.
Yesterday, Department of Finance sources said there had been no specified time frame for the wind-down to be completed, but it was likely to be about a ten-year period.
