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Banking and investment services: European Parliament passes draft Directive on settlement finality

United Kingdom
16/03/1998
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The European Parliament Legal Affairs Committee has endorsed the draft Directive on settlement finality subject to a number of issues which are still under debate.

The aim of the Directive is to protect the banking system in the event of a bank failing to meet its obligations to other banks. The proposal aims to contain the effects of a failure by a credit institution. This would be achieved by protecting certain inter-bank payments from a liquidator in the event of a bank's insolvency. The measure is to extend to cover security settlement too. The Committee is now pushing for modifications to the draft directive relating to possible registration of agreements which benefit from the rules, preclusion of the rules because of knowledge of the insolvency proceedings and whether Member States should be able to impose more stringent conditions than those contained in the directive.

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