The proposal is expected to be introduced in EU summit in June, this year.
The EC president Jose Manuel Barroso said the Commission will advocate an ambitious approach.
"The building blocks could include a banking union with integrated financial supervision and a single deposit guarantee scheme," Barroso added.
According to the proposal, the new unit would oversee and rescue banks, if needed, without having to go through national governments.
In a report published recently, the European Commission said that the current European Banking Authority lacked powers and money to override national regulators and force restructuring of failed financial institutions.
”Already before the crisis, it was acknowledged that the EU model of cross-border banking was not stable,” the Commission added.
Currently, Germany is one of the major lenders that resist allowing a central body to spend money to rescue banks.
