STRASBOURG, France, Sept. 12 (Xinhua) -- The European Commission on Wednesday proposed new banking supervision powers for the European Central Bank (ECB) as part of a banking union.
"The Commission is presenting legislative proposals for a single European supervisory mechanism," European Commission President Jose Manuel Barroso told the European Parliament in Strasbourg in his annual "state of the union" address.
"This is a quantum leap, the stepping stone to a banking union," he added.
Under the banking union proposals, the ECB would get the power to monitor all eurozone banks and others in the wider European Union that agree to the oversight, before the establishment of a fund to close troubled banks and the formation of a scheme to protect citizens' deposits across the eurozone.
"This new system, with the European Central Bank at the core and involving national supervisors, will restore confidence in the supervision of all banks in the euro area," Barroso said.
While urging the European Parliament to play a crucial role in ensuring "democratic oversight," Barroso said, "We should make it a top priority to get the European supervisor in place by the start of next year."
"We want to break the vicious link between sovereigns and their banks. In the future, bankers' losses should no longer become the people's debt, putting into doubt the financial stability of whole countries," he added.