Attempts to reduce the systemic risk to financial markets in the event of an insolvency of a financial institution by allowing such institutions to "net" their obligations with an insolvent institution

Implements Title IV of P.L. 102-242

• Without this statute and its implementing regulations, a financial institution could find itself absolutely liable to a liquidator or receiver on one side of its transactions while standing in line as an unsecured creditor on the other side of its agreements with an insolvent institution

12 CFR 231 - Netting Eligibility for Financial Institution