When finance minister Brian Lenihan announced the bank guarantee scheme after that panicked post-Lehman weekend in late September 2008, he was quick to say that Ireland was leading the world in safeguarding its banking system while other countries seemed paralysed by the financial crisis.
In truth, finance ministers in other countries - notably France, Germany, the UK and the US - were dismayed by Lenihan's haste in guaranteeing all liabilities, which forced them to accelerate their own deliberations at an extremely sensitive time.
Ironically, since then Ireland appears to be the bank-rescue laggard. While other countries have already worked through many of their biggest banking problems and set their economies on the path to recovery, we are still waiting for the first loans to transfer to Nama, to say nothing of a resolution for the nationalised Anglo Irish Bank.
In the US, Bank of America, Wells Fargo and Citigroup all raised money in the capital markets this month to repay the Tarp funds (Tarp stands for "troubled asset relief programme") they took last year as part of the government's $700m rescue response to the near-collapse of its financial system. Investment banks Goldman Sachs, JP Morgan, Morgan Stanley and seven others paid back their money ? with interest ? over the summer, earning Washington a tidy sum from its intervention.
And the Americans aren't the only ones moving full-steam ahead. Even Iceland, where the government was forced to nationalise the entire banking system in October 2008, has managed to restructure, recapitalise and sell two of its three main banks following deals with bondholders. Arion Bank, formerly Kaupthing, is even profitable.
The obvious answer is that the government decided, through the bank guarantee scheme, to underwrite all the liabilities of the domestic banking sector. This created the imperative to come up with a corresponding solution on the asset side. As Central Bank governor Patrick Honohan told an Oireachtas committee last week: "Nama follows from the guarantee as night follows day."
But while it is simple to declare overnight that the state will stand behind all bank liabilities ? such guarantees have no immediate consequences unless a bank fails ? working out what to do with tens of billions of troubled assets requires a certain attention to detail. In Ireland's case, the government's decision to go with a "bad bank" plan entails an enormous amount of due diligence ? on a loan-by-loan basis ? to get off the ground.
Although Tarp was initially conceived as a Nama-like plan to buy bad assets to help US banks unload risk from their balance sheets, it very quickly turned into a straightforward recapitalisation vehicle as US treasury officials realised just how big the problem was. But the Americans were always dealing with a relative handful of big banks, whereas Lenihan had taken on the entire banking system. The scale and scope of the rescue in Ireland meant that swift, quick recapitalisation was both fiscally and functionally impossible.
Instead the solution has been parcelled out slowly. Anglo Irish Bank was nationalised in January when it verged on collapse. AIB and Bank of Ireland were recapitalised not long after. Then Nama was announced.
These moves all brought a measure of stability to the market which saw funding become more available while share prices rose, which bought breathing space both for the government - which has balance-sheet problems of its own - and the banks.
The last two months, however, have shown that the slow pace of Nama has only introduced uncertainty into the banking system again. Certain agenda items are moving forward, such as the restructuring of Irish Life & Permanent and the merger of EBS and Irish Nationwide, but that system-wide solution remains elusive.
Some of the blame must be laid at the government's feet. Institutional investors were poised to buy into a rights issue for Bank of Ireland in October when several European banks were mounting successful cash calls, but Nama took more than six weeks to pass and the opportunity vanished.
Since early November a number of pessimistic statements from the banks have led most analysts to revise their estimates for the Nama haircut upwards, indicating that asset disposals and private money will not be sufficient to meet the banks' ultimate capital needs. Moreover, aggressive demands from the European Commission regarding the application of state aid rules has forced both the banks and the government to rethink some of their rosier scenarios.
Of course, speed is not the only factor to consider. The American banks have been quite frank about their motives for trying to wiggle out from under the government's thumb. Without state money there is no restriction on executive salaries and bonuses, something that grated badly against the dominant He-man capitalist culture of Wall Street. Goldman especially was eager to flaunt its return to profit this year and built up a $23bn bonus fund to prove it.
Perhaps smarting from the Goldman humiliation the US government put the brakes on Citi's exit last Thursday when it said it wouldn't sell its one-third stake in the bank for at least 90 days, especially since its rights issue had pushed share prices down by about 20%. Like any shareholder the US government wanted a return, but its stake had fallen below the purchase price.
The government still has some way to go before bank shares are as bad as they were at the nadir, but the price momentum on the Irish banks right now is also moving in the wrong direction. If it stays that way, rights issues in 2010 will not be easy. It is likely the government will again have to be the source of the required capital. There are a lot of signs pointing to majority state ownership for both AIB and Bank of Ireland once the Nama transfers are finished.
Once that happens Ireland will be setting the clock back to where Iceland was over a year ago or where the UK was early in 2009. That puts us well into 2011 before we have a final resolution.