EU finance ministers have agreed plans to set up super-watchdogs to police banks following the worst economic crisis in decades.
'We've got a result,' said French Economy Minister Christine Lagarde after hours of negotiations among ministers from the 27 EU countries.
The deal paves the way for three pan-European watchdogs to keep tabs on banks, insurers and trading exchanges as well as a Frankfurt-based agency to watch for bigger systemic risks to the economy.
On banks, it envisages a London-based body as overarching arbiter in addressing problems that it judges national watchdogs have ignored.
Although all agreed existing supervisory bodies had failed to head off the financial crisis and recession, ministers had to steer around sizeable hurdles on the day to agree the proposed shake-up of financial supervision.
Britain and France, whose relations are already strained since the appointment of a Frenchman to oversee the EU overhaul of financial services, have different visions for the watchdogs.
France favoured extensive powers but Germany and Britain feared overbearing regulators that would sideline governments and order lenders what to do. Britain, home to Europe's financial capital, London, had mounted the stiffest opposition.
Britain sought to limit the powers of the new cross-border watchdogs, notably to prevent them taking decisions with budgetary implications for a national government.
The new watchdogs are nonetheless sure to give more say than ever to European institutions over an industry blamed by many for triggering the economic slump. The European Parliament has a say in finalising the law, which could see the watchdogs up and running by the end of 2010.
