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LEGAL UPDATES
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Banking (Amendment) (No2) Law of 2011, the Banking Transfer and Collateral (Amendment) Law of 2011
18.07.2011
Area(s) of Practice: Banking and Secured Financing

Two bills related to the Covered Bonds Law of 2010 were approved on 14/7/2011. The “Banking (Amendment) (No2) Law of 2011” aims to the amendment of certain provisions of the Banking Law, in order to ensure its compatibility with the Covered Bonds Law of 2010 [Law 130(I)/2010)] and to enhance its enforcement. The provisions amended are those related to banking secrecy, reform measures applied to credit institutions and procedures followed in cases of bank dissolution or winding up.

Furthermore, the “Banking Transfer and Collateral (Amendment) Law of 2011” amends the basic law [Law 64(I)/1997 as amended by Law 38(I)/2007], to allow, where necessary, the transfer of operations from an acquired bank, that has issued cover bonds as a credit institution, to the acquiring bank. Also the holder of an escrow account (used as guarantee) is given the option to maintain the said account in the acquired bank, provided that (a) the bank will continue its operations and (b) the holder will provide the acquiring bank with a guarantee of the same amount.

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