European leaders have promised the G20 nations they will create a banking union, following pressure from the U.S. and other countries to break the cycle of debt-laden countries bailing out their troubled banks and governments getting ever deeper into debt.

The announcement has received a warm welcome from international leaders, with many praising European efforts to get to the root cause of the debt crisis.

U.S. President Barack Obama welcomed the sense of urgency among European leaders, adding they knew what measures were necessary to break the fever of an escalating debt crisis.

None of them are going to be a silver bullet that solves this thing entirely ... in the next week or two weeks or two months, but each step points to the fact that Europe is moving towards further integration rather than break-up,  Reuters reported.