Eurozone Moves Closer To Setting Up A Banking Union

The euro steadied at $1.3672 on Thursday after falling slightly when the US Federal Reserve announced that it was going to begin tapering slowly at its December policy meeting.

The common currency found some strength in news that the region's finance ministers reached a deal on how the bloc will wind down failing banks as it moves towards a unified banking system.

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Reuters reported that eurozone finance ministers agreed to set up an agency and fund that will close problematic banks when the European Central Bank takes over as banking supervisor next year. This agency is seen as the final piece of the region's banking union, so the agreement was a momentous step forward.

However, the deal has received some criticism from skeptics who believe the process they've agreed on is too cumbersome. Under the new deal, the ECB would first deem a bank as failing through a series of evaluations. The bank is then reviewed by the European Commission, several eurozone countries and a new agency with the power to shut down banks.

The plan will now be passed to the European Parliament where eurozone policy makers will discuss its merits and vote on whether or not to pass it later next year.

Despite the plan's flaws, most are happy to see that the eurozone is moving forward on the banking union as it is considered a necessary step in order to avoid another financial meltdown. The new union promises to strengthen ties between members and sure up the currency union into a more cohesive system, like that in the US.