European Union Commissioner Michel Barnier called on the bloc's finance ministers to dispel doubts about their "political will" to create a single bank supervisor, the Financial Times reported on Monday.
In an interview with the newspaper, the commissioner also expressed support for a cap on bankers' bonuses, criticized a voting system favored by the United Kingdom and suggested EU law could eventually be changed to strengthen the banking union.
Ahead of a meeting of European finance ministers next week, which will test the likelihood of a deal on banking union being struck by the end of the year, Barnier emphasized the importance of reassuring the "fragile" markets.
"Now is the time to decide," the commissioner said. "We need to meet a deadline set by the heads of state. We need a political decision and that is possible."
Some negotiators involved in talks over a proposed banking union, which have stalled in recent weeks, expect the year-end deadline to be missed.
"The markets are not complacent. They remain vigilant and watchful. ... We need to deliver now."
Barnier also offered a solution to the thorny issue of bankers' pay, suggesting a "maximum cap" which could be adjusted, within a set range, by shareholders.
"Banks need to pay attention. They are part of society, they are not outside of society," he said.
The French commissioner opposed UK demands for a so-called "double majority" at the European Banking Authority - whereby there must be a minimum of non-banking union votes in any decision - on the grounds it could lead to "fragmentation".
"The EBA is a body that works for the coherence of the single market. ... A double majority could indeed establish a fragmentation," he said. "We can work on better systems than double majority."
Any deal to establish a Europe-wide banking supervisor would have to be made on the basis of "good solutions in the existing treaties", Barnier said.
But he added that EU law could be changed in the future to accommodate the union better.
"Maybe we can imagine that later on we can consolidate things, improve things," he said.
Copyright 2012 by Reuters. All rights reserved.