The Master Agreement for Financial Transactions, commonly known as the European Master Agreement (EMA), is a highly innovative, multilingual, multi-judicial and multi-product agreement sponsored by the EBF in collaboration with the European Savings Funds Group and the European Association of Cooperative Banks. Contrary to the proposals of the German banking industry, the German banking authority considers that it is not permissible to distinguish between balance sheet positions (as receivables on the transfer of collateral) and off-balance sheet positions (the risk associated with derivatives transactions) is not permissible until the Basel rules on accounting compensation are in force. Cash security must be valued at face value plus interest accrued until the end of the contract (paragraph 9, paragraph 2). Securities security must be assessed on the proceeds of the sale of securities of the same type or, if the non-failing party chooses, the proceeds that the security taker may have received for a sale made immediately after the end of the contract in a manner that protects the interests of the supplier from protection (paragraph 9, paragraph 2). The CSA provides no further guidance as to how to determine the proceeds of a hypothetical sale. It is likely that such a provision can be adopted on the basis of rating courses or screens, provided it is made in good faith and in an economically rational manner. Credit Support Commitments The CSA follows that each party may be required to transfer collateral to the other party, depending on which party has a net commitment under the CSA agreement. The CSA follows the approach of divesting securities as opposed to the security interest approach. This means that, according to the agreement completed by the CSA, a party for which the other party has a risk is required to transfer security directly to the party who is entitled to the guarantee. This transfer is subject (i) to the obligation to return assets equivalent to the guarantee when the guarantee requirement is reduced or ceases, and (ii) to a security underwriter`s right to account for the guaranteed risk relative to the value of the transferred assets in the event of termination and closing of the agreement. In the event of termination of the contract to which the CSA refers, the obligation for the holder of the guarantee to return the guarantees received expires. Instead, the value of the transferred collateral must be included in the net amount to be determined under the terms of the agreement. The credit support obligations of a party to the CSA framework contract are defined on the basis of the „mark-to-market” with respect to net risk under this agreement, subject to thresholds, minimum transfer amounts and add-ons.