21 Mar 2014

EU banking union finalised

3:17 pm on 21 March 2014

The European Union has agreed on the final plank of a banking union meant to clean up European banks and to restore confidence.

European Central Bank, Frankfurt.

European Central Bank, Frankfurt. Photo: AFP

The deal includes establishing an agency with the power to shut down failing institutions, which will be financed by levies on banks.

Under the deal, a €55 billion back-up fund will be established over eight years.

That's quicker than previously planned but far longer than the Euopean Central Bank had hoped.

The agreement completes the second pillar of the banking union, which starts at the end of the year when the European Central Bank takes over as watchdog.