Eurozone ministers agree 'banking union' deal

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EU finance ministers have reached a deal on the final part of creating a eurozone "banking union".

At a specially convened meeting of the Economic and Financial Affairs (Ecofin) Council on 18 December 2013, ministers agreed to develop a €55bn fund - financed by the banking industry - over the next ten years.

The fund would be backed by a new agency, which will decide on how to deal with failing banks.

However, there is still disagreement over how banks will be wound up or re-capitalised in the early years while the new arrangements for banking union are taking shape.

Internal Market Commissioner Michael Barnier said he welcomed the deal, describing it as "a memorable day for Europe's financial sector."

He said the key element of the banking union was the agreement that "taxpayers no longer foot the bill when banks make mistakes - we are ending the era of massive bail-outs."

The banking union consists of three elements - a single supervisory authority to monitor major banks, a common process for winding-up struggling banks, and a common deposit guarantee scheme to protect people with money in ordinary bank accounts up to €100,000.

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