ECOFIN meeting reached a conclusion on a common bank supervisor, a first hurdle to a banking union. The German/Franco deadlock is finally broken and they brokered a compromise deal. Under the agreement, the ECB will have direct responsibility for banks with more than €30B assets or which represent more than 20% of a country’s GDP. Small German banks dodge this definition and thus remain under the ambit of German regulators. In total, 150 to 200 will fall under the regime, which is expected to be implemented early 2014. Another important development is that the ESM could be used to recapitalize banks directly if finance ministers make a unanimous request to the ECB to take over direct oversight over the troubled institution (German FM Schaeuble said we would be well into 2014 before this happens). Discussions on a resolution scheme and deposit guarantees, the other two pillars of a banking union, are postponed from March 2013 to June 2013 but don’t hamper the direct recapitalization possibility. Finally, several legal procedures were agreed upon a way to give non-euro states an equal say in the decision making process (as these states don’t have a vote on the ECB governing council). However, these proved insufficient for the Czech Republic and Sweden, which made clear they won’t join the banking union in the near future.