* German banks face "no existential" risk from Greece
* Secondary effects from Greek decision hard to assess
* Bafin, Buba eye German bank exposure in Spain, Portugal
* Bank/fiscal union medium-term project, not short-term (Adds detail, background)
BONN, June 5 (Reuters) - German regulator Bafin on Tuesday said moves to create a banking union in Europe are premature, as policy makers grapple with ideas to calm down markets roiled by the prospect of an exit of Greece from the euro zone and worries over Spanish debt levels.
Elke Koenig who took over as Bafin president at the start of the year, urged policy makers to take a medium-term view in discussions about moving toward a banking union, a topic which will be discussed by the European Commission on Wednesday.
"You must approach this step-by-step," Koenig said in a speech at the watchdog's annual news conference, stressing that her position was not contradictory to the view taken by her political masters in Berlin, Finance Minister Wolfgang Schaeuble and Chancellor Angela Merkel.
"A lot has been written and said about the topic of a banking union in the last few days. For me, this belongs under the subject of a fiscal union," she said in presenting Bafin's annual report for 2011.
"Should you not first wait to see if the agreed steps have an effect before launching the next idea?"
Germany has balked at signing up to a single European scheme that could see it shoulder the costs of a bank collapse in another country, and Britain fiercely resists any attempt by Brussels to impose EU controls over financial services, which account for almost a tenth of its economy.
Bafin said it viewed the German banking system as relatively robust, even if it could not fully shield itself from the current environment.
"I won't join speculation about Greece's future financial policy but I am certain that Germany's banks are now prepared for all possible scenarios," Bafin president Elke Koenig said in a speech at the watchdog's annual news conference.
Supporters and opponents of Greece's international bailout are virtually neck and neck going into a June 17 election that may decide the country's future in the euro zone, polls showed on Friday, the last day their publication was allowed.
German lenders have limited direct exposure to Greece although it remains difficult to foresee what knock-on effects a Greek exit from the euro could have on other states, Bafin said.
"Greece is a one-off case and you should not compare the problems Greece is facing with others in the periphery," Koenig said in response to a journalist's question, pointing out that Spain was suffering the effects of a burst real estate bubble rather than the structural indebtedness seen in Greece.
Still, Bafin and the Bundesbank were monitoring the situation in Spain and Portugal very carefully, said Bafin's top banking supervisor, Raimund Roeseler.
"We are not travelling through the world blind," he said, pointing out German banks might face risks from individual real estate projects, companies or banks in Spain.
At the same time, Roeseler played down the overall risk: "Spain won't default. It's manageable," he said.
German banks have exposure to Greece in the low two-digit billion euro range, distributed across all German lenders, Bafin said, down from a figure between 15-20 billion at the end of last year. German insurers also have low exposure there.
The figure compares to exposure of more than 100 billion euros each to countries like Italy or Spain, before hedging, it said. (Reporting by Jonathan Gould; Editing by Jon Loades-Carter)