§ 4401. Findings and purpose
§ 4401.
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.