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EU leaders call for 1 body to close bad banks

Sarah Dilorenzo and Don Melvin, Associated Press

German Chancellor Angela Merkel, left, speaks with French President Francois Hollande during a meeting on the sidelines of an EU summit in Brussels on Thursday, Dec. 13, 2012. In one whirlwind morning, the European Union nations agreed on the foundation of a fully-fledged banking union and Greece’s euro partners approved billions of euros in bailout loans that will prevent the nation from going bankrupt. (AP Photo/Michel Euler, Pool)

BRUSSELS (AP) -- European Union leaders are pledging to create a body with the authority to restructure or close down banks in trouble.

The leaders meeting in Brussels said early Friday that such wind-downs should be paid for by money contributed by banks themselves.

The leaders also called for the creation a continent-wide deposit guarantee system.

The commitments come after EU finance ministers agreed to submit their banks to supervision by the European Central Bank — considered an important part of cleaning up the continent's lending sector and ending its financial crisis.