BUSINESS OPINION:TALK ABOUT doing things the hard way. The three big banks have finally been dragged kicking and screaming to the recapitalisation table months after their peers bowed to the inevitable.

Untold damage has been done to the economy by tighter lending as the banks tried every trick in the book to avoid having to raise equity. One bank, Anglo Irish, has self-destructed along the way and the reputation of Irish banking has taken a hammering.

And to top it all, it now looks possible that the deal reluctantly hammered out over the weekend may not fix the problem, but could be just one in a series of interventions.

If there is a common thread to all this it's the persistent refusal of senior management at the banks to face up to the scale of their problems and the failure of the authorities to make them do so. We have had 10 weeks of toing and froing in Government Buildings before settling on a course of action that was all but inevitable once the ink was dry on the State guarantee for the banks on September 30th.

In the interim we have had to listen to the bank chief executives uttering more and more strident denials of their need to raise capital, while their share prices were saying the exact opposite.

Instead of getting on with repairing their balance sheets, the banks set about gaming the Government. Instead of using the guarantee to recapitalise and restructure, they in effect called the Government's bluff by ignoring the issue.

It took the implosion of Anglo - over an issue that while extremely serious was tangential to the capital issue - to bring them to the table.

But the penny still appears not to have fully dropped. We still find ourselves in the situation where banks that should be biting the hand off the Minister for Finance are sulkily taking his money. There has to be a real danger that the banks' intransigence will result in the recapitalisation being botched.

If it is to work well it should be done once and done on such a scale that there is no need to come back for more and no lingering doubts about the banks' ability to absorb losses. In effect the banks need to be substantially overcapitalised until some sort of normality returns to the inter-bank market.

But as of last night it looks as though they continued to refuse to accept this. Instead the sense is that they are taking on board the bare minimum of State money.

Rather than put the issue to bed, AIB wants to limp on in the belief that the market will prefer to hear "we may be okay if we can get a decent price for our shares in MT" instead of: "We have taken money from the Government and the capital issue is sorted."

Bank of Ireland wants to have a rights issue underwritten by the Government as well as accepting direct investment. It may prove self-defeating. The chances of a successful rights issue must be slim if doubts persist about whether they took enough State money. As a result the State as underwriter will have to step in to do then what should have been done in the first place.

It is hard to get inside the heads of management at AIB and Bank of Ireland and their faith in their own abilities given the mess they are in and given that they face into a year in which the economy will shrink by over 4 per cent and more than 100,000 people will lose their jobs.

They have a chance to get their houses in order on the capital front but seem determined to make a dog's dinner of it. And the Government is willing to let them.

The reason they are prepared to run this risk is that the less money they accept, the smaller the dilution for their existing shareholders. While this of itself is a good thing, we are way beyond the stage when it should be the overriding concern of the management and board. It should not be a concern of Government.

The recapitalisation issue has dragged on for far too long as it is. And it looks set to drag on for a good while longer if the plan outlined last night is not deemed adequate. That will be clearer once the market opens today.

The deal reluctantly hammered out over the weekend may not fix the problem, but could be just one in a series of interventions