Intesa Sanpaolo : Euro zone needs more risk sharing, common budget - Panetta

Any effort to expand the 19-country euro zone must be accompanied by reforms to expand risk-sharing and set up a common fiscal capacity, European Central Bank board member Fabio Panetta said on Tuesday.

"The most urgent task we face is to complete both banking union and capital markets union, thereby increasing cross-border ownership of assets and bringing about a more balanced financial structure," Panetta said in Brussels.

"A monetary union as diverse as the euro area also needs a common fiscal instrument to maintain convergence when firms and households collectively retreat across the union," Panetta, one of the ECB's newest board members, said.

(Reporting by Balazs Koranyi; Editing by Alex Richardson)