12 U.S.C. § 4401 — Findings and purpose

FEDERAL · 12 U.S.C. · Chapter SUBCHAPTER I—BILATERAL AND CLEARING ORGANIZATION NETTING

Findings and purpose

12 U.S.C. § 4401

ChapterSUBCHAPTER I—BILATERAL AND CLEARING ORGANIZATION NETTING

This text of 12 U.S.C. § 4401 (Findings and purpose) is published on Counsel Stack Legal Research, covering United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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12 U.S.C. § 4401.

Text

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.

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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.

Source Credit

History

(Pub. L. 102–242, title IV, §401, Dec. 19, 1991, 105 Stat. 2371.)

Editorial Notes

Statutory Notes and Related Subsidiaries

Separability
If any provision of Pub. L. 102–242 or any application of any provision thereof to any person or circumstance is held invalid, the remainder of Pub. L. 102–242 and the application of any remaining provision of such Act to any other person or circumstance not to be affected by such holding, see section 481 of Pub. L. 102–242, set out as a note under section 1811 of this title.

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12 U.S.C. § 4401, Counsel Stack Legal Research, https://law.counselstack.com/usc/12/4401.