A panel of economists charged with improving financial supervision in Europe has called for the formation of a new body to oversee European risk and greater coordination among national regulators, but stopped short of advocating the creation of a single market watchdog in the region.

The "high-level group", chaired by former International Monetary Fund chief Jacques de Larosière, said national supervisors should continue to run day-to-day supervision of Europe's markets and institutions, but that a new European System of Financial Supervisors should be formed to encourage cooperation among regulators. Member states should also agree to more detailed criteria on monitoring cross-border institutions, the report said.