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Eurozone bank supervision: how it works

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By Euronews
Eurozone bank supervision: how it works

<p>The deal reached in Brussels by European Union finance ministers on Thursday to create a single supervisor for the eurozone’s banks is the latest move intended to address a lack of outside confidence in the region in the midst of its financial struggles.</p> <p>The biggest overhaul of the European banking system since the crisis began comes after months of tortuous negotiations.</p> <p>The European Central Bank will take on the role of common banking supervisor. </p> <p>Britain is not part of the deal under which the <span class="caps">ECB</span> will monitor the health of, and the risks taken by, the eurozone’s 6,000 lenders, keeping a particularly close eye on the up to 200 biggest.</p> <p>If one gets into trouble, the <span class="caps">ECB</span> will decide whether it should be bailed out or allowed to go bankrupt, with the cost borne collectively by eurozone governments.</p> <p>This supervision is needed because failing banks have drastically affected some European economies, spreading the debt crisis to governments that stepped in to save their banks.</p>