EU lawmakers approve centralised oversight for banks
BRUSSELS (AP) - European lawmakers approved legislation on Thursday establishing a new, centralised oversight for Europe's largest banks, marking what is considered a key step toward stabilising the bloc's financial system.
The centralised bank supervision authority, which will be anchored by the European Central bank, will be up and running next year following a thorough stress-test of banks' balance sheets.
The so-called single supervisory mechanism is the first of three pillars of the bloc's planned banking union, the cornerstone of efforts to turn the tide on the 17-nation eurozone's three-year-old debt crisis.
Its goal is to make supervision and rescue of banks the job of European institutions rather than leaving weaker member states to fend for themselves. Failing banks in the past have dragged down government finances and forced European Union countries such as Ireland or Cyprus into seeking bailouts.