The European Central Bank (ECB) will establish clear guiding principles and internal operating practices to ensure effective separation of monetary policy and financial supervision, ECB President Mario Draghi said Monday.

Draghi made the remarks at the hearing of the Committee on Economic and Monetary Affairs of the European Parliament in Brussels, adding that the ECB's role as top banking supervisor has no bearing on its primary objective of price stability.

"Separation between monetary policy and financial supervision will in particular take the form of independent analysis and prescription for the use of policy tools for each of the two functions," he said, adding that a supervisory board will be formed for financial supervision.

Draghi said the ECB had begun internal reflections on all these issues and stood ready to launch the formal preparations as soon as the legal framework has been adopted.

Last week, EU leaders agreed to give the ECB broad powers of direct supervision of up to 200 eurozone lenders from early 2014, the first step towards a eurozone banking union.