Banking union plan good basis, warns of scope: Schaeuble

BERLIN Wed Sep 12, 2012 7:22am EDT

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble welcomed proposals for the European Central Bank to supervise euro zone lenders as a "good basis" in establishing a banking union, but warned quality must take precedence over speed in setting up the new supervisor.

"The quality and efficiency of the new supervisor must be the focus. Purely on practical terms it seems impossible for the ECB to monitor 6,000 banks appropriately," he said in a statement on Wednesday.

He repeated his call for the new supervisor to stick to systemically relevant banks and not all euro zone banks.

The proposed banking reforms, which need to be approved by the European Union's member states, aim to break the link between banks and states, preventing heavily indebted countries being sucked further into difficulty by distressed lenders in need of rescue.

(Reporting by Alexandra Hudson)

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