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Irish banks covered by the capital guarantee scheme all met the “regulatory capital requirements as of September 30th” the Taoiseach Brian Cowen told the Dail today.

The finding came from a report by PricewaterhouseCoopers into the scale of bad debts on the loan books of the six lenders covered by the Government's guarantee scheme which was ordered by the Financial Regulator more than a month ago.

However, Mr Cowen admitted “international expectations in relation to capital levels in the banking sector have altered” and said meeting these expectations may be “challenging with consequences for the sector and the wider economy”, adding there was no single solution to the problem.

Mr Cowen said the Government expects covered institutions to explore the potential for meeting these capital needs through “raising private capital and the disposal of appropriate assets”.

In the Dail today Mr Cowen said the report “demonstrates under a number of stress scenarios that capital levels in the covered institutions will remain above regulatory levels in the period to 2011.”

Asked if there would be a bank recapitalisation, Mr Cowen said: "The Government are considering all options in relation to these matters".

The Minister for Finance Brian Lenihan held meetings with the Financial Regulator and the Central Bank last night after Irish banking stocks came under renewed pressure in recent days with shares in Bank of Ireland and Anglo Irish Bank both falling below €1.

The Government is in discussions with a number of international private investors about injecting fresh capital into Irish banks.

Mr Cowen said there was no one solution that could provide a “panacea for all ills”.