The six main Irish banks and building societies currently have €39.1bn loaned out to property developers, the Republic's Financial Regulator revealed yesterday.

€15bn of the construction loans are secured directly on the underlying properties -- the values of which are declining rapidly.

Amid sharp questioning on his role in the ongoing financial crisis, Patrick Neary said the watchdog was recruiting 20 supervisors to send in to monitor the activities of lenders participating in the €500bn Irish Government's guarantee scheme.

Irish banking stocks have endured a sustained pummelling even since the Government introduced its guarantee scheme two weeks ago -- as investors continued to fret, lenders face massive losses on loans to builders over the coming years.

Mr Neary, the chief executive of the regulator, told the Oireachtas Committee on Economic Regulatory Affairs that some €24bn of the total figure is supported by additional collateral or cash flow from other assets.

Con Horan, prudential director at the regulator, explained to the committee that, for instance, a builder may have a development loan out where repayments come from rental income from an office block or shopping centre elsewhere in his portfolio. However, Mr Horan said that this pool of loans "is an area we'd be looking at more intensely at the moment".

This leaves a balance of €15bn of construction loans that are secured directly on the underlying properties -- the values of which are declining rapidly.

Bank of Ireland highlighted last month that it expected the value of projects under development to slide 20pc from their peak last year, with landbank values set to slump between 30pc and 40pc.

"There will undoubtedly be some losses on these exposures," said Mr Neary. But he insisted that the €42bn capital buffer banks have on their balance sheets would be enough for them to stomach the unlikely scenario of the banks writing off all their property development loans.

Mr Neary added that the banks have average 'regulatory' capital ratios -- a key measure of a lender's financial stability -- of 11pc, which is well ahead of the 8pc legal minimum requirement.

However, shares in Allied Irish Banks have slumped 24pc over the past two days, while Bank of Ireland has lost 8pc and Anglo Irish Bank 5.8pc on growing fears these ratios will fall as loan losses spike.

Analysts say the pressure for capital injections in Irish banks has increased since the UK government moved on Monday to invest Stg£37bn in Royal Bank of Scotland, Lloyds TSB and HBOS.

Davy yesterday became the latest stockbroker to point out that AIB, Bank of Ireland and Anglo would need €10bn of additional capital to be on a par with their UK peers.

That level of capital would be more than the three banks are currently worth.

Mr Neary said Irish lenders may have to raise additional capital to beef up their balance sheets and the State may want to get involved in this.

"Market expectations could push other banks to seek equity injections, irrespective of whether or not they continue to meet their regulatory requirements," he said.

However, Mr Neary refused to say -- even under intense questioning -- whether he believes the banks should raise additional cash or if the taxpayer should step in.

Meanwhile, the Irish Government said when the scheme was first announced two weeks ago that the six lenders' assets of €520bn exceeded their liabilities by €80bn. These figures were based on 2007 date for the banks, Mr Horan said yesterday. He said that an ongoing trawl through the banks' books indicates that the difference hasn't changed much.

Mr Neary declined to go into specifics of the Dublin Government's scheme before Taoiseach Brian Cowen provides details to the opposition today.

However, he said the regulator is now requiring banks to set out new business plans, focusing on the need to lower their risk profile.

"There will be enhanced reporting obligations in relation to capital, asset quality and individual large loans to supplement our daily liquidity reporting requirements," said Mr Neary.