It is not the European Central Bank's job to stop cross border bank mergers, supervisory chief Claudia Buch said on Wednesday, just as Germany's Commerzbank was looking for ways to thwart a potential takeover approach by Italy's UniCredit .

Nagel and his predecessor Jens Weidmann campaigned for years for the greater riskiness of some national government bonds to be reflected in their accounting treatment. However, under the Basel 3 accords, EU banks are allowed to assign a zero risk weight to eurozone government debt, signifying no effective risk of default.

An interest-rate cut that European Central Bank officials deemed unlikely just three weeks ago now seems a near certainty when they next set policy on Oct. 17.

Expectations for another quarter-point rate cut by the European Central Bank are on the rise due to growing evidence of a significant slowdown in both inflation and economic activity.