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European leaders have already said they want to create a so-called resolution authority and come up with a way to directly recapitalize banks, but they have disagreed on how robust to make these measures and how quickly to put them into place. The IMF's call could add extra pressure to push them along. The report is also pushing the EU to move faster on other issues. The report says the single supervisor should be in place by June with the ability to directly supervise any bank. The agreement negotiated in December indicated the supervisor might take up some of its functions this spring
-- although it hasn't yet -- and then would slowly ramp up operations over the following year. The report warned that slow growth in Europe poses long-term risks for financial markets that have not yet adjusted their models. It particularly cited European insurance companies. "Solvency in the insurance sector is under pressure from low returns and the stagnant economy," it said.
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