Euro-area nations did what was once said to be politically impossible—sign an agreement on pooling money to deal with crisis-hit banks.

All European Union (EU) governments except the U.K. and Sweden signed the plan, which sets out how nations should transfer monies raised from levies on their banks to a central fund that could be tapped in crises. The fund is part of a broader move to joint supervision and crisis management of euro-area banks that other EU nations can sign up to voluntarily. The signing took place at a meeting of ambassadors today in Brussels.

"The resolution fund will ultimately provide a degree of stability in times of financial stress," David Ereira, a partner at law firm Linklaters LLP in London, said by e-mail. "It completes the development of the European banking regulatory framework."

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