14 Dec 2012

EU ministers reach eurozone banking deal

2:27 pm on 14 December 2012

European Union finance ministers have agreed a deal to create a single supervisory body to oversee banks across the eurozone.

The deal - to be put to an EU summit in Brussels - also paves the way for Europe's rescue fund to provide direct help to troubled banks.

Under the deal, the European Central Bank would directly supervise about 200 of the biggest banks and will act as chief supervisor of eurozone banks, the BBC reports.

New rules on prudent banking are seen as vital to bolster the euro, as bank failures triggered the financial crash.

The measures are also aimed at preventing banking failures, of the type that happened in Greece and Spain, ending up on the books of eurozone governments.

Eurozone finance ministers also agreed formally to release a long-delayed instalment of €34 billion to Greece over the next few days, with a further €15 billion later. Athens has been waiting for the bailout funding since June.