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.