Eurozone Bank Union Deal Agreed

Under the deal, banks with more than EUR 30 B in assets will be placed under the oversight of the European Central Bank. Photo by EPA/BGNES

European finance ministers have reached agreement on a eurozone banking union ahead of an EU summit in Brussels, BBC reported.

The deal follows months of strained negotiations between member states and it will now be put before European leaders later on Thursday.

New rules on prudent banking are seen as vital to bolster the euro, as bank failures triggered the financial crash.

The EU has already agreed that the European Central Bank (ECB) will act as the chief supervisor of eurozone banks.

"We have reached the main points to establish a European banking supervisor that should take on its work in 2014," said German Finance Minister Wolfgang Schaeuble, after 14 hours of talks ended shortly before dawn.

Under the deal, banks with more than EUR 30 B in assets will be placed under the oversight of the European Central Bank.

he deal gives the ECB powers to close down eurozone banks that don't follow rules. It also paves the way for eurozone rescue funds to come to the aid of struggling banks.

"Piece by piece, brick by brick, the banking union will be built on this first fundamental step today," said EU Commissioner Michel Barnier.

EU leaders believe that the first stage of a banking union - a Single Supervisory Mechanism (SSM) - can be put into place without having to change EU treaties.

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