European Council President Herman Van Rompuy said the 27 leaders agreed at a Brussels summit to adopt a legal framework by the end of the year giving the European Central Bank overall responsibility for banking supervision.
After almost 10 hours of talks, he told a news conference:
Once this is agreed, the single supervisory mechanism could probably be effectively operational in the course of 2013.
More top news
Mild but cloudy
On his 93rd birthday, Robert Mugabe insisted he has no plans to stand down as Zimbabwe's leader and vowed to stand again in the election.
A Muslim teacher, who was denied entry to the US, has told ITV News he was 'distraught' when he was removed from the flight.