The Government's plan to split Anglo-Irish Bank in two is no silver bullet to revive confidence in the banking sector, finance minister Brian Lenihan has warned.
The plan will see the nationalised institution divided into a savings wing and a second division tasked with running down the loan book and money lending will be banned.
Mr Lenihan said the cost of the wind-down would be known by the start of October.
"We need to take a series of measures that build confidence," the minister said. "Yesterday is not a silver bullet in terms of creating confidence but it's an important step."
Unveiling the plan on Wednesday, Mr Lenihan said Anglo owed 72 billion euro and a quick wind-up would leave the state to pick up the bill.
The decision on Anglo followed months of discussions and proposals with European Commission chiefs and options put forward by Anglo management. The last two days, Mr Lenihan spent discussing the future of Anglo with Competition Commissioner Joaquin Almunia and European counterparts.
The bank last week announced losses of 8.2 billion euro and is forecast to need a bail-out of at least 25 billion euro.
Under the Government's plan, to be authorised by the EC, the two new banks will be rebranded - one as a so-called Funding Bank holding customer deposits of 23.2 billion euro and the second an Assets Recovery Bank tasked with managing 38.4 billion euro of loans. Money lending will be outlawed, the Department of Finance said.
Anglo management had favoured a good-bank bad-bank split, with 80% of the toxic lender shut down and a new viable bank created from the good loans.
Mr Lenihan told RTE Radio: "Management and the board wanted to see if they could carve a good bank out of the Anglo-Irish structure but the difficulty there was that in the current market climate and given the huge reputational damage done to Anglo by the previous management it was very difficult to see how that could have been done."