Central Bank governor Patrick Honohan said today that additional funding for Anglo Irish Bank and Irish Nationwide was "essentially lost money."
He also expressed regret that the Central Bank had not taken a more pessimistic view of how much the bank bailout would cost the taxpayer.
Mr Honohan was speaking after the Central Bank today announced a final estimate for the cost of the Anglo Irish Bank bailout of at least €29.3 billion.
It also said AIB will require an additional €3 billion in funding while Irish Nationwide needs a further €2.7 billion.
Speaking on RTÉ radio at lunchtime, Mr Honohan admitted that the extra funding for Anglo and Irish Nationwide was "essentially lost money" but said the investment into AIB "should yield returns over time".
Today's announcement will bring the cost of the overall State bailout of the banks to some €45 billion with the prospect of further losses if property prices fall further.
Mr Honohan said this morning's announcement "gave as much certainty as could be reasonably expected" at this time.
Admitting that the sums invested in propping up Anglo in particular were "colossal," the governor said the banks bailout could be managed without needing to seek emergency financial aid from the EU and the International Monetary Fund (IMF)
"It is not painless by any means. It is going to be a severe pain as will the adjustment of the overall fiscal deficit which emerged on normal tax and receipts as part of the boom that we got caught up in," he said.
"I think the time we're through this in 2014, the banking contribution to our debt will be about a third of the increase," Mr Honohan added.
The governor rejected suggestions that Nama had paid too much for the first two tranches of loans transferred to the agency. He also denied claims that the Central Bank had been involved in a cover-up over the total cost of the bailout.
Mr Honohan said the policies now being pursued by the Government were correct and added he was sorry the Central Bank had now been more pessimistic in estimating the total cost of the bank bailout.
