"The euro-zone bank union must be implemented more quickly than what was decided at end June, with supervision and risks joined together and direct recapitalization of banks by the EFSF-ESM funds," Confindustria research body CSC said in a study.

European Central Bank president Mario Draghi on Thursday pledged to do whatever was necessary to protect the euro zone from collapse, prompting hopes of an ambitious new program.

"The extraordinary intervention of the ECB of two rounds of three-year loans has prevented the violent credit crunch from worsening. But in many cases this is no longer enough," CSC said.

The study said heavy buying of government bonds would repair banks' battered balance sheets and help reduce disparity between credit conditions in Europe's core and periphery.

Portugal, Ireland, Italy, Greece and Spain not only face write-downs on public debt and lower bank capital ratios, but also a decline in deposits, which risks blocking funds to the economy, CSC said.

Bank accounts deposits in Italy fell by 55 billion euros ($67.77 billion) or 7.2 percent in May from a year earlier, while in Germany they rose by 135 billion euro or 12.5 percent and in France by 55 billions or 11.1 percent over the same period, according to data cited in the study.

(Reporting By Danilo Masoni; editing by James Jukwey)

• A Permanent Economic Emergency