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Polish Government To Review Netting Legislation

The Polish Ministry of Finance has agreed to review provisions for netting derivatives transactions in a draft bankruptcy bill. The Polish Bank Association has held meetings with the government and is optimistic that all financial institutions will be able to net transactions within a year, according to Norbert Jeziolowicz, policy advisor to the president of the Polish Bank Association in Warsaw.

At the moment only Polish banks are allowed to net derivatives trades because the law is incorporated in the banking act rather than the bankruptcy act, said Jacek Jonak, partner and co-head of Polish finance and capital market practice at Allen & Overy in Warsaw.

The current draft of the bankruptcy act does not allow netting, however, Jonak said that is because the drafters have not considered the problem, but now are willing to work on an amendment.

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