After 14 hours of talks European finance ministers have reached a deal to give the European Central Bank new supervisory powers.
All 27 member states agreed to hand the ECB the authority to police directly the euro zone’s biggest banks and to intervene in smaller ones at the first sign of trouble.
The new system which should be up and running by March 2014 represents a major step towards establishing full banking union.
The new rules are seen as vital in order to bolster the euro since it was banking failures which triggered the financial crisis.
It is now up to EU leaders at Thursday’s summit to give the accord their full political backing.
Deal reached over new watchdog role for ECB