An agreement has been reached on the way the European Central Bank (ECB) will be responsible for the supervision of banks within the framework of the single supervisory mechanism.

The agreement, made between the Council of the EU, the European Commission and the European Parliament (EP), was announced in a press release.  Billed as being the first step towards a European banking union, the press release summarizes areas where the EP pushed through changes to improve democratic accountability, including a stronger role for national parliaments, a strict division of the ECB between monetary policy and supervision and stronger accountability of the supervisor by the EP.

The next step in the process towards the single supervisory mechanism will be the formal ratification of the agreement by the EP.