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EU reaches financial supervision agreement

An agreement has been reached over a new system of financial supervision across the European Union.

Officials agreed to create three new agencies that will oversee banks, insurance firms and financial market trading in the 27-nation bloc.

The watchdogs will have limited powers to overrule any decisions made by national regulators if they feel that financial stability is at risk.

It is hoped that the new structure will help to prevent a repeat of the financial crisis by identifying risks early and acting in a coordinated way to reduce them.

The new agencies are likely to be created in January next year, provided the deal
is ratified by European finance ministers and the European parliament.

Internal market commissioner Michel Barnier said: "The new framework is a crucial stage in our effort to learn all the lessons from the crisis to better protect our economy and our citizens in the future."
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