The European Union's finance ministers took a first major step towards a banking union early Thursday by agreeing to give the European Central Bank broad supervisory powers.

"Most banks will be under the direct supervision of the ECB. The ECB will be in charge," French Finance Minister Pierre Moscovici told reporters after a meeting of EU finance ministers that lasted more than 14 hours into early Thursday morning.

The single supervisory mechanism (SSM) will be composed of the ECB and national competent authorities, the Council of the EU said in a statement.

"The ECB will be responsible for the overall functioning of the SSM," and "have direct oversight of eurozone banks, although in a differentiated way and in close cooperation with national supervisory authorities," the statement added.

Non-eurozone EU member states wishing to participate in the SSM will be able to do so by entering into close cooperation arrangements, the Council said without specifying which countries among the 10 EU countries that don't share the euro will participate. Endi

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