Lenders from Ireland and Spain are expected to be the first institutions to be covered by new ECB-led regulatory regime. union.
Ireland's banks are expected to be swept into the new structure in the first half of next year, writes Business Editor David Murphy.
There will be significant advantage to Ireland when its banks are covered by the new regulatory regime.
The development would have the effect of allowing access to funds in the European Stability Mechanism.
These funds could be used to buy shares in AIB, Bank of Ireland and Permanent TSB. Banks which are being wound down will be excluded.
Ireland had put €30 billion into AIB, Bank of Ireland and Permanent TSB although investments in those banks are now valued at €8 billion by the National Treasury Management Agency.
Minister for Finance Michael Noonan is now leading negotiations regarding getting investment from the ESM in the Irish banks.
The new regulatory regime will mean that each of the 17 members of the euro zone will have a representative as part of a group which will head the new regulatory structure.
There will also be a new secretariat which would be likely to include a number of individuals from the Ireland's Central Bank.
The largest banks in Europe will be directly regulated by the ECB in Frankfurt and smaller institutions would be supervised by local regulators.
While the development gives the ECB overall supervisory responsibility for banks this measure has to be agreed by the EU council.
