Eurozone bank deal agreed

After months of negotiations, an agreement has been reached on a eurozone banking union that will pave the way for the establishment of a European banking supervisor.

The EU has already agreed that the European Central Bank (ECB) will act as the chief supervisor of eurozone banks.

"We have reached the main points to establish a European banking supervisor that should take on its work in 2014," said German Finance Minister Wolfgang Schaeuble, after 14 hours of talks ended shortly before dawn, the BBC reports.

The new deal gives the ECB the authority to shut down banks in the eurozone that have breached the rules. It also paves the way for eurozone rescue funds to come to the aid of struggling banks.