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EU reaches deal on banking union, ending protracted negotiations

The European Union has reached a deal on a major step toward creating a banking union that is meant to stabilize the financial system and make it easier to deal with troubled banks.

After all night negotiations lasting into Thursday, EU member states and the parliament broke a deadlock on how to set up a joint authority that can restructure or shut down failing banks.

Corien Wortmann-Kool, a lead negotiator for the parliament, said that "this is very good for restoring confidence in European banks."

She said that under the new rules troubled banks could be dealt with "within a weekend" instead of the protracted process before that often undermined credibility in the EU's financial system.

Negotiators had insisted on reaching a deal before the European elections in May.