The European Union has agreed the terms of a deal which will see centralized supervision of the eurozone banks.
The deal is expected to come into effect in March 2014, and will see the European Central Bank (ECB) acting as supervisor-in-chief of the eurozone banks. The deal will affect financial institutions with assets greater than 30bn euros ($39bn; £24bn) or with 20% of national GDP.
Around 80% of Europe’s banking transactions are conducted through the City of London, though UK banks will not be included in the deal. UK Chancellor George Osborne has stressed that he has worked hard to ensure the deal will protect the City.
The deal is a crucial step towards a full banking union. This is believed by many to be necessary and inevitable, in order to solve the eurozone crisis.
The deal has been reached ahead of the next EU summit, which is about to begin.