The EU on Tuesday approved the creation of a centralized banking supervisor, marking another step in the 28-country bloc’s long quest to stabilize its financial system.
Finance ministers at a meeting in Luxembourg cleared the final legal hurdle to the establishment of the new banking supervisor, which will be operated by the European Central Bank and directly oversee the bloc’s 130 biggest banks.
‘‘Now we will start hiring supervisors, rent buildings and start the coming (bank) stress test,’’ ECB executive board member Joerg Asmussen said.
The so-called single supervisory mechanism will be based in Frankfutr and will start recruiting about 1,000 new staff. It is due to be operational late next year after assessing European banks’ balance sheets through a stress test that will identify possible capital shortfalls. Full story for BostonGlobe.com subscribers.