As part of the EU and International Monetary Fund's â¬75 billion ($113.8 billion) bailout package, Taoiseach Brian Cowen's administration is poised to see Irish financial institutions' level of core tier one capital boosted to 12 per cent.
The government is expected to provide the required funding for the initiative by pumping cash into the Bank of Ireland - already 36 per cent state-owned - and Allied Irish Bank in return for a majority holding.
Central bank governor Patrick Honohan this week expressed his support for the eventual sale of Ireland's banking system, telling reporters: "I have been an advocate for a number of years for small countries to have foreign owners for their banks."
Earlier this week, the Green Party announced plans to resign from the Irish coalition and demanded a general election be held early next year.
By Asim Shah