Amendments To The Financial Collateral Act

Originally published in IFLR/International Briefings Slovenia, July 2011

On the 30th of June the latest amendment to the Financial Collateral Act (FCA) will come into force, with its main objective to assist the economy in tackling the credit crunch, thus creating new jobs and incentives for economic growth. The underlying reasons for the amendments to the FCA may be attributed to the European Commission's conclusion that the range of collateral assets need to be extended to bank loans, especially since the importance of bank loans as collateral assets in the EU is growing. At the same time, it was necessary to facilitate and remove national barriers to the creation of such collaterals, and to unify the rules for transactions between central banks in order to promote cross-border use of the said collaterals.