Lucas Papademos said the ECB could take responsibility for policing large banks operating across borders in the 16-country eurozone, working in conjunction with national central banks.
Although Europe avoided a bank collapse on the scale of US firm Lehman Brothers, European policymakers fear the existing fragmented structure, based on national institutions, leaves the region dangerously exposed.
Proposals to strengthen the ECB's role at the expense of domestic regulators would run into heavy opposition in national capitals. Some European Union policymakers would also prefer to keep eurozone bank regulation at arm's length from the ECB's responsibilities for setting interest rates and combating inflation.