Statute · United States Code
12 U.S.C. § 4401 — Findings and purpose
12 U.S.C. § 4401
- Type
- Statute
- Source
- United States Code
- Jurisdiction
- Federal
- Date
- 2025-01-06
- Topic
- capital-markets-and-corporate-governance
The Congress finds that— (1) many financial institutions engage daily in thousands of transactions with other financial institutions directly and through clearing organizations; (2) the efficient processing of such transactions is essential to a smoothly functioning economy; (3) such transactions can be processed most efficiently if, consistent with applicable contractual terms, obligations among financial institutions are netted; (4) such netting procedures would reduce the systemic risk within the banking system and financial markets; and (5) the effectiveness of such netting procedures can be assured only if they are recognized as valid and legally binding in the event of the closing of a financial institution participating in the netting procedures.
The Congress finds that— (1) many financial institutions engage daily in thousands of transactions with other financial institutions directly and through clearing organizations; (2) the efficient processing of such transactions is essential to a smoothly functioning economy; (3) such transactions can be processed most efficiently if, consistent with applicable contractual terms, obligations among financial institutions are netted; (4) such netting procedures would reduce the systemic risk within the banking system and financial markets; and (5) the effectiveness of such netting procedures can be assured only if they are recognized as valid and legally binding in the event of the closing of a financial institution participating in the netting procedures.