Earlier in the year, the European Commission issued its evaluation report on the Financial Collateral Arrangements Directive (2002/47/EC). Amongst other things, the Commission proposes an extension of the Directive's scope to include certain credit claims that, as of 1 January 2007, were eligible as collateral for Eurosystem credit operations. The Commission believes that one of the benefits of this extension would be to mobilise the sizeable portion of banks’ balance sheets that are tied up in credit claims. The market is still waiting for further, substantive developments on this proposal.

View European Commission proposes wider scope for Financial Collateral Directive, (PDF 69.5KB), December 2006