The group headed by former Bank of France Governor, Jacques de Larosiere, was asked by the European Commission to suggest how to reform supervision found wanting in the credit crunch.
Just 45 banks – such as BNP Paribas, Deutsche Bank and HSBC – hold 70 per cent of total EU deposits.
Attempts to forge a European approach to supervision have been deadlocked for years as countries don't want to delegate oversight powers over key players on their financial market.
Big banks want a more streamlined system of supervision to cut down on the costly reporting requirements they face in all the EU countries they have branches.
The report has been closely guarded but lawmakers and policy players expect Larosiere to propose some kind of embryonic body for coordinating national supervisors that would pave the way to a more powerful EU regulator after a change to the EU treaty.
The creation of the European Monetary Institute which became the European Central Bank (ECB) is seen as a model to follow and a "third way" between tinkering with the current weak system of cooperation among national financial supervisors and a quantum leap to a fully fledged EU supervisor.
"Perhaps an intermediate solution might be the most realistic whereby the EU treaty change is prepared by an agency, with some normative powers, preparing the creation of a European institution," said Eddy Wymeersch, chairman of a committee that groups all national securities watchdogs in the EU.
"One will recall that the European Monetary Institute also set up the European Central Bank," Wymeersch said.
The European Commission will use the de Larosiere report to propose changes to supervision for EU leaders to discuss at a summit in March, and could be part of a wider supervisory debate at the G20 summit in London in April.
Karel Lannoo, chief executive of Brussels think tank CEPS, said he would welcome an EMI-type equivalent for financial supervision to emerge from the Larosiere report.
"They could create it tomorrow. It's better to have a single body. We need to have a way to get from A to Z," Lannoo said.
But Alexandre Lamfalussy, who headed the EMI, said setting up a body with nominal powers was not enough.
"It you want to build an institution that collects information you have at the same time to build something that triggers a reaction," Lamfalussy told reporters in Brussels.
Other options could include beefing up coordination among national banking, insurance and securities supervisors. The ECB also wants a role in overseeing system-wide risks that arise from banking activities.