Plans for a bank union in the 17-nation eurozone have moved painstakingly slowly, prolonging the existence of so-called bad banks saddled with non-performing assets left over from the financial crisis.
"We understand that the process may be frustrating for the market, but for European standards we are moving very fast," said Benoît Cœuré of the European Central Bank (ECB).
"The creation of a banking union is as important as the establishment of the creation of the single currency," he told an International Capital Market Association conference in Copenhagen.
But while many at the conference publicly insisted that the crisis in Europe was safely in remission, bankers privately said full union - still a year or more away - is taking far too long.
"Europe's recovery is way behind the United States because it failed to take the necessary steps to sort out its banking sector," said one US banker here who asked not to be named.
"The ECB and politicians spin a nice story. But behind the scenes, the market is concerned that Europe may just go into a slow decline that cannot be reversed."
The living dead
Winding down the zombie banks is crucial to the ECB's proposed banking union, which would create central supervision in the hopes of avoiding state-guaranteed banks in Europe from ending up with balance sheets stuffed with toxic assets.
The bad banks created to hold those assets need to be closed down and have their assets written off, but this cannot be done until most, if not all, of the banking union has been accomplished.
"Europe needs the banking union to be implemented as soon as possible so we have a clear idea of asset valuations in all of the region's banks," said a banker at one of Europe's largest financial institutions.
"Strong central bank supervision and cross-national regulation is also necessary - and it will be important for Europe to deal with its legacy issues."
Those "legacy" issues include ongoing weakness in the banks of the European periphery such as Spain and Italy, nations whose economies have been especially hard hit by the crisis.
The recession in Italy continues to deepen, for example, and bad loans in the country's banks have been climbing in recent months at a whopping annualized rate of 20%.
Pending stress tests could reveal that mid-sized Italian lenders are billions of euros short of the capital they need - putting even more pressure on a government whose balance sheet is already groaning with dead weight.
The proposed union would create an authority to oversee eurozone banks.
