The European Union (EU) said it wants banks to pay into an emergency wind-up fund to pay for any future crisis in the sector, according to market reports.

The idea of a wind-up fund is in the early stages, although how it would work in practice is still unclear.

The European Commission is increasingly concerned that there is still no way for the European governments to track the activities of cross-border banks, making any sort of early warning system hard to set up.

The EU plans to present a paper on how to deal with future threats to cross-border banks to European finance ministers later this year.

The Commission will present a draft law in spring 2011 to harmonize tools national supervisors use to handle failing banks in a region where about 35 cross-border firms make up 70% of all deposits, according to a Reuters report.

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