Germany's finance minister says it's unlikely that a new Europe-wide banking supervisory system will be up and running in the new year, dampening hopes that stressed banks could soon tap euro zone rescue funds directly.

Internal market commissioner Michel Barnier said last week he hopes it could be phased in starting next January.

German Finance Minister Wolfgang Schaeuble today told Deutschlandfunk radio: "I think that's pretty unrealistic."

The European Commission will make proposals for the system on September 12.

EU leaders have agreed funds set up to bail out indebted governments could be allowed to funnel money directly to ailing banks, rather than via governments, increasing their debt burden, once an effective central bank supervision system is established.

"I have my doubts that it will come so quickly, and so I think that once again expectations are being created here that can't be fulfilled, not even close," Schaeuble said. "That is always a reason for trouble and nervousness in the financial markets."

Berlin and Brussels already appear at odds on the extent of the new supervisor's powers.

Barnier has argued that all banks need to be supervised centrally by the European Central Bank; Germany argues that the supervisor should limit its focus to major banks whose stability is vital to Europe's financial security.

Germany insists that, if the supervisory job is handed to the ECB, decision-making on banking supervision and monetary policy must be strictly separated.

The ECB is currently working on plans for a bond-buying program aimed at lowering the borrowing costs of debt-ridden governments, including Spain and Italy. ECB President Mario Draghi is expected to detail a new approach after the monthly meeting Thursday of the bank's governing council.

The plans are controversial in Germany, which is the biggest backer of Europe's financial rescue efforts.

The country's national central bank, the Bundesbank, and its head, Jens Weidmann, oppose a big escalation in the ECB's bond-buying strategy. They argue that it risks breaching the EU treaty provision barring the ECB from directly backing governments.

Chancellor Angela Merkel, however, has indicated she's open to the ECB's plans while still insisting that she wants Weidmann to have as much influence as possible at the bank.

Schaeuble stressed that the government respects the independence of the ECB and the Bundesbank. He cautioned against raising "wrong expectations" and expressed confidence that the ECB won't exceed its mandate.

"There must be no decisions -- we would consider them completely wrong, they would not be covered by the mandate of the European Central Bank, but the European Central Bank won't do that -- that would amount to government debt being financed through monetary policy," he said.