European Union finance ministers reached an agreement early today to create a single supervisor for their banks - one of the most significant transfers of authority from national governments to regional authorities since the creation of the euro currency.

Under the deal, banks with more than 30 billion euro in assets supervised or those that represent a significant proportion of their national economies will be placed under the oversight of the European Central Bank.

The deal gives the ECB broad powers, including the ability to grant and withdraw banking licences, investigate institutions, and financially sanction banks that do not follow the rules.

Perhaps most important is that it paves the way for Europe's rescue fund to directly rescue the continent's troubled banks.

The meeting was attended by Finance Minister Tonio Fenech. 

Following a series of bilateral meetings with the Cypriot Presidency, the Commission and the European Central Bank, Minister Fenech managed to ensure that small banks will not be subject to ECB supervision through a Malta proposal in the text which foresees that banks with a total value of assets below €5 billion will remain under national supervision. 

The meeting discussed voting modalities and it was ensured that the proposal retains the principle that the Supervisory Board within the ECB will operate on a one member one vote principle.

Later on today Prime Minister Lawrence Gonzi will attend the European Council in Brussels which will also focus on Economic and Monetary Union while Minister Tonio Fenech will also remain in Brussels to attend a meeting of the Eurogroup.