Page last updated at 16:53 GMT, Monday, 17 December 2012

Economic and Monetary Affairs Committee

The president of the European Central Bank, Mario Draghi, has warned that "the ties that bind" eurozone countries are being "tested" by the ongoing debt crisis.

Speaking during his regular evidence session with the Economic and Monetary Affairs Committee on 17 December 2012, he welcomed the "determination" of EU institutions to deepen economic and monetary union.

Much of the session focused on the details of plans to create a centralised supervision scheme of banks in the eurozone.

Around 200 of the biggest banks will come under the direct oversight of the European Central Bank (ECB), which will act as chief supervisor of eurozone banks.

Mr Draghi said he welcomed the fact that eurozone countries were "ready to agree to a substantial sharing of sovereignty when circumstances require".

Some eurozone leaders - such as French president François Hollande - wanted the supervision scheme to cover all eurozone banks, but German Chancellor Angela Merkel has been more cautious, wanting the scheme to primarily focus on larger banks.

The ECB will have responsibility for eurozone banks that have assets greater than €30bn or with at least 20% of national GDP.

The deal is expected to take effect in March 2014, accompanied by greater scrutiny of the national budgets of eurozone countries.

Mr Draghi added that similar measures were taking place globally, such as the Bank of England taking on a supervisory role from the UK's Financial Services Authority (FSA).

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