BRUSSELS (AP) -- European Union officials say they have cleared a major hurdle toward establishing a full banking union in their bid to stabilize the bloc's financial system.

European Parliament lawmakers, the EU Commission and government representatives said Tuesday they reached an agreement on the laws establishing a centralized banking supervisor.

EU leaders agreed last year to establish a joint banking supervision that will operate under the aegis of the European Central Bank. It will lay the groundwork to set up after 2014 a common deposit insurance scheme and an authority with powers to dissolve or rescue financial institutions.

The agreement comes at an odd time -- just days after the 17-nation eurozone forced Cyprus into seizing a part of bank deposit to help finance its bailout package.