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.

The timetable remains important, because only when the body is fully operational will the eurozone’s rescue fund inject cash directly into

Read more: BBC News – EU summit: Compromise deal on eurozone bank supervisor.