EU Leaders Agree on Creation of Single Bank Supervisor

European Central Bank will oversee the new mechanism

EU leaders have agreed to set up a single eurozone banking supervisor - a major step towards a banking union.

A legislative framework is to be in place by 1 January next year, with the body starting work later in 2013.

The European Central Bank-led mechanism will have the power to intervene in any bank within the eurozone.

The deal appears to be a compromise between France and Germany, who earlier disagreed over the timing and over the number of banks the ECB would oversee.