EU leaders ‘agree to greater banking oversight’

EU leaders at a Brussels summit agreed to create a single mechanism for overseeing eurozone banks that will be rolled out during 2013, according to diplomats.

EU leaders at a Brussels summit agreed Thursday to create a single mechanism for overseeing eurozone banks that will be rolled out during 2013, according to diplomats. France and Germany had been at odds over the issue leading up to the meeting.

German diplomats say leaders meeting in Brussels have reached agreement on creating a powerful single supervisor for eurozone banks and the plan will be implemented at some point next year.

France and Germany have been tussling over how to best shore up Europe's struggling banks. France wanted a single supervisor in place by the end of this year - because that would allow Europe's bailout fund to directly loan money to banks, a key tool in fighting the crisis.

But Germany has been dragging its heels because it's nervous about such loans.

The diplomats said leaders reached agreement Thursday night to draw up the legal basis for the supervisor by the end of this year. They will then put it into place sometime in 2013.