German court upholds EU-level banking watchdog

FRANKFURT, Germany (AP) - Germany's highest court has upheld a new European system of bank supervision aimed at preventing financial crises and expensive taxpayer bailouts.

The Federal Constitutional Court said in a ruling issued Tuesday that the governments of the 28 European Union nations did not exceed the scope of the EU's authority when they set up the system, which has been dubbed a "banking union."

The system set up in 2014 consists of an EU-wide watchdog that can call time on failing banks and another entity, the single resolution mechanism that can quickly wind down busted banks and limit the impact of such failures on the economy.

Oversight was moved to the EU level due to concerns that national-level supervisors tended to look the other way as problems built up at home.