Irish banks are still so fragile as we head into the final quarter of the year that when AIB borrows money at a crippling 4.6% interest rate, it's regarded as some sort of moment to celebrate. The three-year money the bank raised last week doesn't have the benefit of a state guarantee, hence the fund raising was described by some as the seminal moment when Irish banks finally threw off the crutch of state support they've been using since September 2008.

This is expensive money by any standards. Even UK banks located in the worst recesses of the intensive care ward, like RBS, are paying 3.47%. Nevertheless, Irish banks this time last year were barely able to raise one-week money, never mind three-year money, so clearly a thawing is under way.

But remember, the Irish banks still have such a bad image problem that the Irish government feels the need to guarantee every euro on deposit in each Irish institution. Even if funding pressures ease, the far bigger problem of inadequate capital takes its place.

During visits to stockbrokers last week, the banks were reported to be almost carefree about this issue saying they should have enough capital to just about make it through the cycle.

But of course, this barely adequate capital is perfectly acceptable for the banks themselves. Holding less capital ultimately means less need for state investment and that's always going to be popular with bank management.

However, banks with inadequate capital cushions are timid 'safety first' institutions, not banks prepared to lend at levels required for an economic recovery.

Now that banks are finding it easier to access liquidity, the debate must surely start to focus on their capital levels and whether they are sufficient to meet the reasonable national economic goals of the country/taxpayer. So far the Financial Regulator and government haven't even been prepared to touch on this subject in public, but surely with the banks in a slightly safer place we can all come out from behind the barricades.