According to a report in the Irish Independent, governor Patrick Honohan is believed to prefer such an approach, which would reduce the both state's exposure to banking losses, although other figures within the central bank favour EU and IMF support.
"An insurance scheme would be even more attractive under present circumstances than additional capital in restoring market confidence in the banks, enabling them to access wholesale term funding at a reasonable cost," Professor Honohan said last week.
However, anonymous sources from within the insurance industry have suggested that some firms would be hesitant to sign up to such an agreement in the wake of the recent crisis.
Earlier this week, Taoiseach Brian Cowen came under fire after it was revealed in a book that he had had previously unpublicised meetings with former Anglo Irish Bank chairman Sean FitzPatrick.
By Asim Shah