The Performance, Banking Risks, and their Regulation Free Essay Example, 1500 words

The provisions of the EC regulation include prior intimation to all creditors (which includes Bank A)about the winding up procedures of Bank B. Under Article 23 of the Regulation, Bank A will be permitted to square off the debts owed to bank B against those owed to itself in multiple trading transactions, through the process of netting. Every individual derivative transaction may have different dates of payment, etc however by combining some of those payments into one, (for example, those that use a particular currency), close out netting can combine all dues to determine net value, will enable such common debts to be paid on a combined basis rather than being paid individually3 This netting option must be specified in the contract to offset cherry picking by liquidations when the winding up procedure is initiated. Third Point: Jurisdiction to be included in the contract: Conflict of laws will occur between the home state of Bank A which is England versus the home state of bank B. Although they are both in Europe and subject to the Directive, nevertheless the winding up proceedings occur in accordance with the laws of the home country of Bank B, which may operate according to a different set of laws on insolvency and winding up. We will write a custom essay sample on The Performance, Banking Risks, and their Regulation or any topic specifically for you Only $17.96 $11.86/page