"We back the idea that a single supervisory mechanism is necessary, but we note that the proposal that is on the table at the moment raises more questions than it provides answers," Vitas Vasiliauskas, on a visit to the Cypriot capital of Nicosia for an informal meeting of EU economic and finance ministers (ECOFIN), told BNS on Friday.
"It gives a vague description of the allocation of banking supervision functions, duties and powers between the European Central Bank (ECB) and national supervisory bodies. It will take more than one round of discussions to reach a final agreement," he said.
On Wednesday, the European Commission unveiled its proposals for a European banking union.
In the proposed single supervisory mechanism (SSM), the ECB will have the ultimate responsibility for specific supervisory tasks related to the financial stability of all euro area banks, while national supervisors will continue to play an important role in day-to-day supervision and in preparing and implementing ECB decisions.
The EU's executive body proposes to have the SSM in place by 1 January 2013, with a one-year phasing in period.
