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Eurozone Finance Chiefs Agree to Unified Banking Oversight

Eurozone finance chiefs have agreed to centralized controls over failing banks in Europe's 17-nation euro currency bloc.

The finance ministers late Wednesday adopted a plan that would force the shareholders and creditors of banks, instead of governments and taxpayers, to cover losses when any of Europe's more than 6,000 financial institutions collapse.

The agreement is aimed at protecting the eurozone from having to bail out its member governments, as it has done in recent years after they were forced to rescue banks in their countries.

The agreement calls for eurozone banks to create a $75 billion fund over the next decade to handle the shutdown of failing banks. Before the banks' fund is fully financed, individual governments could still borrow money from an existing eurozone rescue fund to keep banks from failing, or cover their bad debts from their own budgets.

French Finance Minister Pierre Moscovici said the agreement will help the eurozone countries attack a root cause of the debts that forced Greece, Ireland, Portugal, Cyprus and the Spanish banking system to secure massive rescue packages since 2010.

"It (the agreement) allows us to fight against the causes, the links between the sovereign debt and the bank crisis which facilitated the 2008 crisis, which led to the real economic crisis. It allows us to have security in the European financial and banking system and it constitutes the framework that we need to face the crisis."

The plan still needs approval by the European Parliament.