FINDINGS AND PURPOSE.

SEC. 401. [12 U.S.C. 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.