-As expected, the European Parliament finally approved the Council Common Position on Financial Collateral without amendments.
The lack of any clear set of rules for collateral has been a major disincentive to cross-border transactions in the past. The Directive will contribute to greater integration and cost-efficiency in European financial markets by determining which law governs cross-border collateral arrangements and by making it possible for traders and dealers to conclude such arrangements in the same manner throughout the EU.
Internal Market Commissioner Frits Bolkestein, said: 'We will now at last have a clear framework of rules for collateral and that will boost cross-border transactions and help integrate EU financial markets. By determining which law governs cross-border collateral arrangements and by allowing market participants to set up such arrangements in the same way all over the EU, the Directive will reinforce financial stability and make borrowing easier and cheaper.'
The new Directive must be implemented within 18 months of its forthcoming publication in the Official Journal of the European Communities, i.e. by the end of 2003
Adopted Directive
Council Common Position as of 20 February 2002
Commission press release
© European Parliament
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