Internal Market and Services Commissioner Michel Barnier said: “Today's compromise allows us to complete the architecture of the Banking Union for the eurozone. This would not have been possible without the assiduous work and spirit of compromise demonstrated by both co-legislators.

It represents a major step towards the alignment of both banking supervision and banking resolution at a central level, whilst involving all relevant national players. Backed by an appropriate resolution funding arrangement, and an acceptable decision-making process, this second pillar of the Banking Union will allow bank crises to be managed more effectively. In case of cross-border failures, it will be much more efficient than a network of national resolution authorities and will help to avoid risks of contagion. The Single Resolution Mechanism might not be a perfect construction but it will allow for the timely and effective resolution of a cross border bank in the eurozone thus meeting its principal objective.

Together with the reforms to the financial sector for all 28 countries, the completed Banking Union will put an end to the era of massive bailouts. It will further contribute to the return to financial stability thus creating the right conditions for the financial sector to once again lend to the real economy which is essential to consolidate the economic recovery and to create jobs.

This political agreement is just in time to allow the current European Parliament to confirm the trilogue agreement in April's final plenary session. I would like to thank all those involved in the negotiations... for this major achievement. Thanks to the strong sense of responsibility demonstrated today, Europe is living up to its commitments."

Following a meeting with the Parliament's negotiators and political group leaders, EP President Martin Schulz stated: "The compromise over the single resolution mechanism is an enormous success. This agreement is another major step towards restoring the stability of the euro zone and making it more immune to the crisis in the future. We need a strong banking union to break the negative feedback loop between sovereign debt and the health of the banking sector.

The group leaders agreed, with an overwhelming majority, to advise their members to endorse the compromise. Three major points were considered as key improvements from the beginning of the negotiations.

First, the decision-making process and the governance were greatly streamlined making it possible to resolve a bank over the weekend. The decision-making process is now not only speedier, but it is also a truly European one allowing for a fair treatment of all banks, whatever their country of origin.

Secondly, the rapid mutualisation covering 60 per cent of the resources in the first two years and the remaining mutualisation in the following six years was hard-fought, but a decent and fair deal.

Thirdly, the credit line from the fund - highly disputed between the Council and the Parliament - is a real step forward.

If you compare these achievements with what was tabled by the Council on 18 December last year, you can easily see how far the Parliament has come in the negotiations. On this occasion, I would like to commend the role of the EP negotiating team, and in particular the lead-rapporteur Elisa Ferreira. I would also like to praise the President of the Eurogroup Jeroen Dijsselbloem and the Greek Council Presidency, for their cooperative style in the negotiations and their respect for the European Parliament's position. This approach was conducive to a successful agreement."

The proposal put forward by the Council of Finance Ministers would have involved a system under which 126 persons would have had to hold discussions over five days in nine separate forums before being able reach a decision on the resolution of a bank. But such decisions often need to be taken over a weekend, in order to prevent a run on the banks and financial market turbulence! The agreement reached at long last at 5 o’clock this morning makes it possible for a pragmatic, neutral and effective decision to be taken over a weekend.

The proposal put forward by the Council of Finance Ministers would also have involved not a single European resolution fund, but a fund divided into national compartments. What is more, it would have been under-capitalised. Logically, therefore, the countries in which banks are based would have continued to be liable for their losses. This system would have done nothing to implement the basic principle underpinning banking union, namely that banks should bail out banks. Instead, the taxpayer would have continued to foot the bill.

How could the European Central Bank have credibly carried out stress tests to assess the viability of banks if it knew that, should a serious problem arise, there would be no robust and effective resolution mechanism to fall back on? If that had been the system on offer, then we would certainly be better off having no single resolution mechanism at all.

Full speech