Europe agrees ECB as chief bank watchdog

City A.M. Reporter
European ministers clinched a deal this morning to give the European Central Bank (ECB) new powers to supervise Eurozone banks from 2014, paving the way for a banking union.

Following marathon talks that finished before dawn this morning, EU finance ministers agreed that at least 150 of the Eurozone’s biggest banks will be directly overseen by the ECB.

The agreement will be put before EU leaders, who are due to meet in Brussels today and tomorrow, to give it full political backing.

After three years of piecemeal crisis-fighting measures, agreeing on a banking union lays a cornerstone of wider economic union and marks the first concerted attempt to integrate the bloc's response to problem banks.

The new banking supervision system should be up and running by March 2014.