One might have thought the continued feather-bedding of Irish banks would have exercised the minds of TDs in Dail Eireann last week as they argued over the National Asset Management Agency (Nama) and more than 250 amendments tabled the opposition.

Instead, the debate was largely about more frothy issues. Would disgraced bankers get seats on the seven-seat Nama board, which has yet to be formed? Would the new chief executive be muzzled? What was this sinister SPV (special purpose vehicle) that was being used to park the debts associated with the agency? What would happen if somebody tried to bribe a Nama executive or director with a bottle of Château Latour? The opposition spent hours hitting wrong or non-existent targets.

The debate rumbled on for hours, finishing at 5.30am on Friday. Because the committee stage was held in the Dail chamber, uninvolved TDs could ramble in and out, saying whatever came into their heads. The contributions tended to be grandiose in the morning, tetchy in the afternoon, as deputies grew tired, and whimsical at night as they became spent forces. It hardly represented the ideal christeneing process for such an important agency.

It was only in the small hours of Friday morning that Brian Lenihan, the finance minster, admitted that losses incurred by Nama would not be recouped via a future bank levy, which would be like an albatross round the financial institutions’ necks. Instead, money could be clawed back via a higher-than-standard rate of corporation tax on any future bank profits, he said.

Opposition deputies sneered at his approach to risk sharing, which would see just 5% of the money given to the banks — €2.7 billion out of €54 billion — paid in the form of subordinated debt, which would put the government at the back of the queue when the banks pay their lenders. This, incidentally, could carry a taxpayer-financed running yield of 5% or even 7%, which could not be cashed in immediately as its value would depend on Nama being a success.

The opposition wants to protect the taxpayers’ interests, but the paradox is that the more it tries to do so, the more damage it inflicts on the future capital base of the banks and therefore the more money Mr Lenihan may have to find to recapitalise those banks in due course.

Nama is issuing €2.7 billion of its bonds as subordinated debt because the opposition and the Green party wanted to shift part of the “risk” to the banks. It’s only a token. But it means Mr Lenihan would have to pay interest on the subordinated bonds at 7% instead of 1.5% because he does not want the current value of those bonds, which have an uncertain future value, to fall to zero. If that happened, the government would have to pump more capital into the banks that hold those bonds.

It’s a vicious circle. Unlike the cheap European Central Bank money currently being used by Nama, any further capital pumped into the clearing banks through the National Pension Reserve Fund would cost more than 4% a year to finance.

It now seems inevitable that the state will have to increase its stake in Allied Irish Banks (AIB), which is off-loading €24 billion in loans, of which 70% are in the high-risk “land and development” category. This will mean a big hit to AIB’s capital base, since Nama will pay only a discounted value for these loans, crystallising extra bad debts.

Mr Lenihan says he will address opposition concerns about the future availability of capital to Irish business at report stage this week. But it remains to be seen whether these measures will be aspirational or enforceable, and the government is still open to the charge that it has been too soft on the banks.

Its gamble in taking ownership of a large slice of the Irish banking system is that when those banks recover, the state will make a profit. It’s a gamble that simply has to be taken, however. To repeat the cliché, Nama remains the only game in town.

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