The move by financial regulator Pat Neary to retire early has drawn mixed reaction from Opposition parties.
Mr Neary announced his decision last night over the handling of the regulator's investigation into the €87 million in secret directors' loans at Anglo Irish Bank.
Fine Gael said Mr Neary's retirement was an inevitable consequence of the failures of the regulatory regime that had been exposed in recent weeks.
The party's deputy leader, Richard Bruton, said it remained to be investigated why practices identified in Anglo were not reported up the line and acted upon within Mr Neary's office.
“This resignation may be the first tangible signal that the people in Irish banking, both at a commercial and regulatory level, that brought our banking system to this low ebb will not and cannot be the people that bring us out of this mess,” Mr Bruton added.
The Green Party has welcomed the decision of financial regulator Pat Neary to step down and has called for stronger regulatory powers.
Green Party chairman Dan Boyle said: “It is clear that confidence in the Irish financial services sector has been badly eroded by the events of the last six months.
"The inability of the regulatory authority to acquire appropriate information pertaining to the stability or otherwise of Irish financial institutions has meant that Mr Neary’s stepping down had become inevitable."
"It is a necessary measure to restore confidence that had been so badly dented,” said Mr Boyle, the Greens’ finance spokesman.
"There is a need now not only to find a suitable replacement for Mr Neary, but also to strengthen the powers available to the regulatory authority so we can avoid in the future a reoccurrence of the recent events in the Irish financial sector," he said.
Sinn Féin finance spokesman Arthur Morgan condemned the Government for refusing to fire Pat Neary for “presiding over the blackest period in Ireland’s banking history”. Mr Morgan said it was “shocking” that Mr Neary had been allowed to remain in his position until this point.
“That he can walk away under the guise of retirement without having to take responsibility for his failure to the people of this State who are the ones ultimately who will pay a heavy price is outrageous”.
He added it was time that senior people in the banking sector to take the financial regulator’s lead.
An internal investigation by a committee of the Irish Financial Services Regulatory Authority found that there had been a breakdown in internal communication and process within the regulator's office, following the discovery of the hidden loans to Anglo's former chairman Seán FitzPatrick in January 2008.
