European Commission President Jose Manuel Barroso called on Wednesday for a full EU banking and budget union, key steps in anchoring the bloc's future as it fights the eurozone debt crisis.
"Securing (the) stability of euro is the most urgent challenge," Barroso told the European Parliament, and setting up a single bank sector regulator in the shape of the European Central Bank is an essential response.
He told lawmakers that simple coordination between member states was no longer adequate and coordinated supervision was an "absolute priority today because its the basis for better managing banking crises."
EU financial services commissioner Michel Barnier is due to present details of the plans later on Wednesday, with the ECB slated to take on many of the responsibilities now jealously guarded by some major states.
Draft proposals have suggested the ECB will have sweeping new powers, including the key authority to issue and withdraw banking licences.
EU leaders agreed the new banking supervisor in June as part of a deal to allow the bloc's rescue funds to directly lend funds to stricken banks instead of passing aid through countries and adding to sovereign debt problems.
It is a first step towards a banking union and sits alongside moves towards the deeper economic and political integration needed to tame the debt crisis which has brought the eurozone economy to a standstill.
The proposal is controversial, reducing the role of the London-based European Banking Authority which was set up in the wake of the 2008 global financial crisis.
Barroso said "all actors should respect the ECB's independence," and added that the EU "must go further ... we must complete economic and monetary union."