Patrick Honohan has said it was not surprising that talks on Ireland's bank debt issue has suffered from "two steps forward and one step back".

The Central Bank Governor said it was a very complex situation where each player was "trying to redesign the the system on the hoof".

''The process was continuing and we will see what happens," he said.

He made his comments after Germany, Holland and Finland made a statement which was widely seen as a set back for the Government's bank debt negotiations.

Mr Honohan said too many firms which have survived the crash have still not recovered and require restructuring.

He was speaking at a corporate restructuring summit at the National Convention Centre in Dublin today.

Patrick Honohan said resolving these ongoing problems could have a significant impact on the economy.

"By reinvigorating the business sector, it would ultimately help boost economy-wide employment. Requiring unusual and scarce skills and judgement, this urgently deserves heightened attention," he said. 

CSO figures show the number of industrial enterprises, which excludes the agricultural sector, fell from 5,600 in 2008 to 4,800 in 2010.

The Governor said that despite this "big shakeout" many of the firms which remain are in a weakened condition and require their balance sheets to be restructured.

"Many balance sheets are stressed because of unwise property investments made on the side of a viable non-property business," he said.

Mr Honohan said that when restructuring works well the assets of the firm, including its staff, will find a good alternative use. He pointed out that this had not always been the case in the past in Ireland.

In the case of aircraft leasing firm GPA and Irish Shipping in the 1980s physical assets had been purchased and used by new owners but employees had not fared as well, he said, and had found it difficult to get another job.

The Central Bank head said the banks themselves will play a key role in restructuring.

"The banks in turn need to be provided with sufficient capital to allow them to fearlessly accept and crystallise the unavoidable loan-losses, sufficient liquidity to be able to provide further financing to set the restructured firm back onto a healthy growth path, and eventually move it out of the limbo of financial distress," he said.

Too many companies which have survived the crash still require restructuring the Governor of the Central Bank has said.

Patrick Honohan said resolving these problems could have a significant impact on the economy.

"It would ultimately help boost economy-wide employment. Requiring unusual and scarce skills and judgment, this is a task which urgently deserves heightened attention," he said.

He also said the decision by the Government to accept property loan losses before they were quantified was a "big mistake".

He was discussing the establishment of NAMA.