News Summary: EU to set who pays when banks fail

DEBATING INTO THE NIGHT: The 27 European Union finance ministers are seeking an agreement on how best to shrink or close ailing banks without spreading panic or having to call on taxpayers for bailouts.

BANKING UNION: An agreement would be another step to stabilize the bloc's financial system and establish a so-called banking union. A banking union will make the supervision and rescue of banks the job of European institutions rather than member states.

STUMBLING BLOCKS: One big issue is should losses be limited to banks' shareholders and creditors, or should small companies and ordinary depositors also be included? Another is how much leeway member states should be granted in making decisions. Some countries like Britain don't want to be bound by rigid rules, others warn against too much flexibility.