ECB wins role as banking watchdog

City A.M. Reporter
THE EUROPEAN Union agreed yesterday to let the ECB police Eurozone banks, taking its first step towards a banking union just as a levy imposed on Cypriot savers showed that the bloc will struggle to respond in a united way to bank problems.

The European Parliament and member states’ representatives sealed an accord reached late last year to give the European Central Bank powers to supervise euro zone banks from the middle of next year.

Under the deal, banks that have assets of €30bn (£25.6bn) or more than one-fifth of their country's economic output will be overseen by the ECB rather than national supervisors.

“The deeply distressing problems faced by Cyprus show how insufficient this step is in itself,” said Martin Schulz, president of the European Parliament.