funded credit protection

Definitions over time (1)

1. 20/07/2006 – 17/04/2007 Article 4, Directive 2006/48/EC (CRD) Scope: Whole act

   For the purposes of this Directive, the following definitions shall apply:

   ‘funded credit protection’ means a technique of credit risk mitigation where the reduction of the credit risk on the exposure of a credit institution derives from the right of the credit institution — in the event of the default of the counterparty or on the occurrence of other specified credit events relating to the counterparty — to liquidate, or to obtain transfer or appropriation of, or to retain certain assets or amounts, or to reduce the amount of the exposure to, or to replace it with, the amount of the difference between the amount of the exposure and the amount of a claim on the credit institution;

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