The EU Commission has published guidelines for a common Union-wide approach to dealing with toxic assets at banks.
It says national schemes should be open to all banks with toxic assets and that nationalisation is an option.
Separately, a report on oversight of financial institutions across the EU has recommended the establishment of two new bodies which would monitor economic risks and improve the supervision of financial institutions.
The report comes from a high-level group advising the EU Commission, headed by Jacques de Larosiere, a former governor of the Bank of France and a director of the International Monetary Fund.
Mr de Larosiere said ‘Financial regulation and supervision have been too weak or have provided the wrong incentives. Opacity [and] complexity have made things much worse.’
The group recommended setting up a European Systemic Risk Council, chaired by the European Central Bank and including national banking and insurance supervisors, to give early warning and compare analyses.
They also suggested setting up a decentralised network called the European System of Financial Supervisors, which would be independent of political authorities but accountable to them.
The group's report will form a basis for discussion at two EU summits in Brussels in March.
However the suggestions by Mr de Larosiere and his team of senior European business and government experts stopped short of calling for an overarching EU financial regulatory body, because of opposition from member states.
The report also calls for a revamp of the current banking, insurance and securities supervisors - CEBS, CEIOPS and CESR - with three new bodies replacing them.
