Banks with operations in many EU states say it is costly to deal with various national market supervisors and that it would be cheaper to have a single, consolidated watchdog.
Central bankers will not be rushed into action, however.
"The European Central Bank supports an evolutionary rather than a revolutionary approach to further development of an EU framework to banking supervision," ECB Vice President Lucas Papademos told a European Banking Federation conference.
Michel Pebereau, chairman of BNP Paribas bank, said consolidated supervision is needed sooner rather than later and that the industry was moving much faster than its watchdogs.
"The banking industry has to adapt to markets that are evolving each day. For us the speed of evolution is very rapid," Pebereau said.
"We need evolution of the public sector at the same speed as our own evolution. We wish to be still alive at the moment evolution of the public sector will take place," Pebereau added.
Next month EU finance ministers discuss a report from Internal Market Commissioner Charlie McCreevy, which lists obstacles to cross-border banking mergers.
The report is expected to say that supervisors can abuse their rights, on prudential grounds, to stop a merger, according to newspaper reports. McCreevy has said he wants a more restrictive use of this tool.
The report follows the travails of a Spanish bank and a Dutch bank in bidding to take over Italian banks, which led to accusations that the Bank of Italy obstructed foreign take-overs.
Jaime Caruana, an ECB governing council member, said the events in Italy were not consistent with the idea of a single market and welcomed McCreevy's report.
"Supervisors have a role, but it is a limited role, to play in fulfilling their responsibility that banks are not taken over by shareholders that are not suitable on prudential grounds. This is as far as we should go," Caruana said.
Progress has already been made in convergence of supervision, but it is necessary to go further in an evolutionary way for now, said Caruana, who is also governor of the Bank of Spain.
"If we don't succeed in meeting our objectives, we should not be afraid of exploring more radical solutions. The cost of non-integration is too high," Caruana said.
Bankers accept that a single banking regulator is not legally possible under current EU rules and that member states were loathe to delegate supervisory powers to another country.
There is also the unanswered question of which country would end up using its taxpayers' money for a bailout in the event of a cross-border banking crisis, bankers said.
As a result, closer ties between national watchdogs are seen as the only practical solution for now.
"The possibilities of co-operation are not yet exhausted," said Elemer Tertak, a director in the financial institutions division of the European Commission.