Title 12 — Banks and Banking
Chapter 45 — Payment System Risk Reduction
§ 4401. Findings and purpose
Statutory text
The Congress finds that—
many financial institutions engage daily in thousands of transactions with other financial institutions directly and through clearing organizations;
the efficient processing of such transactions is essential to a smoothly functioning economy;
such transactions can be processed most efficiently if, consistent with applicable contractual terms, obligations among financial institutions are netted;
such netting procedures would reduce the systemic risk within the banking system and financial markets; and
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.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Federal Deposit Insurance Corporation Improvement Act of 1991
Pub. L. 102–242 title IV § 401 · 105 Stat. 2236
Enacted · 12 U.S.C. § 4401
(Pub. L. 102–242, title IV, § 401, Dec. 19, 1991, 105 Stat. 2371.)
Source evidence
Code source credit
(Pub. L. 102–242, title IV, § 401, Dec. 19, 1991, 105 Stat. 2371.)Enacted provision · exact public law section
SEC. 401. FINDINGS AND PURPOSE. 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.
1 of 1 references resolved to an enrolled provision
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.