Swedish FSA says EU banking union plans risk being devisive

STOCKHOLM, Oct 10 (Reuters) - Sweden's financial watchdog said current proposals for a European banking union could run the risk of dividing the single market and that supervision should be complemented by a system for dealing with failing banks before it was introduced.

Swedish Financial Supervisory Authority head Martin Andersson said plans for a banking union now on the table risked creating a division between members of pact and those who remained outsiders.

"This would be at odds with what we have been working toward for so many years, the creation of a single market," he told reporters on the sidelines of a news conference on Wednesday.

(Reporting by Johan Ahlander)

((Niklas.Pollard@thomsonreuters.com; +46 70721 1110; Reuters Messaging: niklas.pollard.reuters.com@reuters.net))