19 Oct 2012

EU to create eurozone banks supervisory body

6:44 pm on 19 October 2012

European Union leaders have agreed to phase in a single supervisory body for eurozone banks during the course of next year.

A legislative framework is to be agreed among member states by 1 January 2013.

The European Central Bank (ECB) will be given supervisory responsibility, with the power to intervene in any bank within the eurozone.

The deal appears to be a compromise between France and Germany, who earlier disagreed over the timing and over the number of banks the ECB would oversee.

France and the EU Commission wanted joint banking supervision, with the ECB in the lead role, to be launched in January.

But German Chancellor Angela Merkel has been more cautious. She says national budget discipline is the priority.

The arrangement could involve as many as six thousand banks.