Leaders of the bloc agreed to take emergency action to bring down Italy and Spain's surging borrowing costs, create a single supervisory body for eurozone banks, and enable the bloc's ESM bailout fund to lend directly to recapitalise banks.
Investors appeared impressed with the measures which came as the banking system was struggling to come to terms with the Libor scandal which has rocked Barclays.
The banks' false information over the rates at which it borrowed money have sent shockwaves across the globe and knocked billions off the lender's value.
Meanwhile Barclays, HSBC, Lloyds and RBS have agreed to pay compensation to customers they misled about interest rate hedging products, following an investigation by Britain's financial regulator.
On London's blue chip index the banking sector added 1.6 per cent.
Barclays nudged up by two per cent, Lloyds 2.6 per cent and RBS 2.2 per cent.
CRH, which specializes in building materials, was the highest individual climber, up 4.7 per cent.
Building services firm Wolseley was up more than three per cent. Steelmaker Evraz put on 3.7 per cent and miner Vedanta 3.5 per cent.
On the down side pharmaceuticals heavyweight GlaxoSmithKline was down 0.5 per cent while telecoms giant Vodafone dipped 0.4 per cent.
In Asia the Nikkei closed up 1.5 per cent and the Hang Seng 2.1 per cent.