Minister for Finance Brian Lenihan said today a bank investigator will be named "in a matter of days".
Mr Lenihan said he had a number of people in mind for the role, but he declined to name any at this stage.
Speaking on RTÉ Radio One's Morning Ireland, Mr Lenihan defended the decision to opt for a commission of inquiry, saying a public inquiry would be costly to taxpayers.
"I've seen a big demand for a public inquiry, but let's be frank about it; if you want me to sign a cheque for €150 million now for the next 10 years and set up a tribunal of inquiry, that's what's going to happen if we go for a public inquiry," he said.
"There are very grave doubts about whether the Dáil can make findings of fact. That again would be a very complex matter."
Speaking during Leaders' Questions in the Dáil this morning, Taoiseach Brian Cowen insisted the inquiry would be "independent and statutory".
He said Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore had "predetermined" the issue. “We don’t need an inquiry at all, according to them. Because they know exactly what goes on,” Mr Cowen said.
Mr Kenny told the Dáil this morning that while inquiries into clerical child sex abuse had to be held in private because the victims were children, there was no reason to hold the banking probe in secret.
"The victims in this case are the working taxpayers of Ireland, who are now faced with pensions lost, negative equity, difficulty in paying mortgages and an understanding and perception that white collar crime does pay," he said.
The Taoiseach said he would co-operate with the commission of investigation, however it chooses to take evidence.
"I have no problem whatever in relation to any of these matters, and how the commission wishes to proceed," he said.
"I will facilitate that without any difficulty, in terms of how I deal with my responsibility."
Two preliminary inquiries are due to be completed by the end of May, and a commission of inquiry under an expert chairman will be established by June 30th and asked to report by the end of the year. The terms of reference for the third inquiry will be set by the Oireachtas, Mr Lenihan said.
An Oireachtas committee would then have an opportunity to examine the report and call witnesses if it wished, he told RTÉ.
"What I think the people are anxious to see here is not just investigations and inquiries, but real consequences for those in the banks who engaged in serious misbehaviour," he said.
"I've instructed Anglo Irish to pursue all of those who owe them money to the last cent, and I've exercised a complete veto over any settlement with directors in Anglo Irish bank in the future."
Mr Lenihan said the response of Government departments, as well as the regulator, would also be examined in the preliminary exercise. However, he said the decisions taken by the Government since the crisis erupted, such as the nationalisation Anglo Irish and the bank guarantee, would not be included.
However, Labour's Joan Burton today said there were serious legal doubts over the role that is planned for the Central Bank governor Patrick Honohan, who will carry out what Mr Lenihan this morning described as a "scoping exercise" that would identify issues that needed to be addressed by the inquiry.
"There are serious question marks over the capacity of the governor of the Central Bank, Patrick Honohan, to fulfil the role planned for him by the Government in regard to the proposed inquiry into the banking crisis," the finance spokeswoman said today.
"Because he is being asked to make a non-statutory report, without any legal protection or powers, the Governor of the Central Bank will be bound by section 33AK of the Central Bank Acts, passed in 2003," Mr Burton said.
"This section prohibits the Governor, the Bank and Ifsra from publicly discussing or disclosing in any manner any commercially confidential information in relation to any regulated firm or individual."
The Labour frontbencher said said it was therefore difficult to see how any inquiry undertaken by Mr Honohan "can contribute to public knowledge on the events that led to the banking crisis".
Last night, Mr Lenihan told the Dáil there were a number of broad themes that ought to be examined thoroughly by the commission of inquiry.
They included the performance of individual banks and bank directors where wrongdoing and lax practices have contributed considerably to the crisis; the performance and structure of the banking system generally; the performance of the regulatory and Central Bank systems; and the response of the relevant Government departments and agencies, including the linkage between the banking crisis and overall economic management.
Green Party leader John Gormley said that he was happy with the shape of the inquiry and said the Oireachtas could have a role in calling people to account after the commission of inquiry had reported.
Fine Gael's Mr Kenny said the Government’s proposal was designed to cover up Brian Cowen’s policy and regulatory failures during his four years as minister for finance, in the lead-up to the banking and economic crisis.
“The Government attempted to whitewash over the years of Government policy failures that led our economy over the edge of a cliff 18 months ago. Rather than a transparent and public inquiry into the policy decisions and regulatory failure that led to our banking sector collapsing, we have a secretive, behind-closed-doors process designed to delay and frustrate any public scrutiny,” he said.
Labour's Ms Burton described the Government proposals as a sham and said they represented total political humiliation for the Green Party.
Additional reporting - PA