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Bundesbank: bank union can't solve current crisis

BERLIN (AP) -- The head of Germany's central bank says a future Europe-wide banking supervision system can't solve the region's financial crisis, and is expressing concern that struggling countries might delay efforts to shore up their banks.

Hopes of establishing the new system for the 17 countries that use the euro have quickly faded, with Germany in particular insisting it needs thorough preparation.

Bundesbank President Jens Weidmann said Monday the so-calling banking union “cannot solve the current crisis” and shouldn't be introduced “over-hastily.”

The eurozone's rescue fund will be able to recapitalize banks directly once the union has started _ but Germany and others insist that can't apply to losses already incurred. Weidmann said some countries' expectations they could wipe out losses “threatens to delay the reform process in the banking system.”

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