Europe to see new banking plans on Sept 11

The European Commission is to outline its plans for a banking union on September 11.

The new entity will supervise the banking industry across the bloc and will have a key role in winding up failed lenders to prevent them destabilising the financial system.

It is designed to work alongside the permanent rescue fund, the European Stability Mechanism which will be able to directly aid banks in difficulty.

Spain is expected to be the first beneficiary of the new system, after agreement was reached at EU level to provide up to €100bn to its stricken banks.