European stocks were set to rise on Friday, extending the week's rally and tracking gains on Wall Street where a raft of reassuring macro data eclipsed lingering worries over the euro zone debt crisis.

Spreadbetters expect the FTSE <.FTSE> to open around 33 points higher, or up 0.6 percent, Frankfurt's DAX <.GDAXI> to open 54 points higher, or up 0.9 percent, and Paris' CAC 40 <.FCHI> to open 30 points higher, or up 1 percent.

A drop in U.S. weekly claims for jobless benefits to a 3-1/2-year low as well as improvement in U.S. consumer sentiment in December boosted U.S. stocks on Thursday.

The banking sector will be in the spotlight after Europe's recently created super-watchdog, the European System Risk Board (ESRB), said late on Thursday the dangers facing Europe's financial system have continued to worsen, and urged the euro zone to get its new rescue fund up and running.

Departing European Central Bank Executive Board member Lorenzo Bini Smaghi said on Thursday the ECB has the option to use quantitative easing-style policies if the threat of deflation emerges and can also boost its bond buying if required.

Italy's banks are almost halfway towards meeting their funding needs for 2012 after they tapped 116 billion euros of cheap long-term cash from the European Central Bank on Wednesday.

(Reporting by Blaise Robinson; Editing by David Cowell)