Bank One Corporation - Page 60

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          automatic stay and permitted swap participants to net positions             
          in the setting of a bankruptcy.  Congress passed the Federal                
          Deposit Insurance Corporation Improvement Act of 1991 (FDICIA),             
          Pub. L. 102-242, 105 Stat. 2286, 1 year later.  Under 12 U.S.C.             
          sections 4401-4407 (2000), which were enacted as part of the                
          FDICIA, netting provisions are viewed by the CFTC as designed to            
          assure the enforceability of netting among specified financial              
          institutions and among members of clearing organizations for                
          CFTC-regulated exchanges.  By enacting the FDICIA, and the                  
          Financial Institutions Reform, Recovery, and Enforcement Act of             
          1989, Pub. L. 101-73, 103 Stat. 277, each applying to failed                
          depository institutions, Congress reduced systemic risk by                  
          providing a high degree of legal certainty that netting                     
          provisions would be upheld in insolvency proceedings in the                 
          United States.                                                              
               In the case of a foreign entity counterparty, netting was              
          not always enforceable.  Of the 488 swaps at issue for 1993, 173            
          were with foreign counterparties.  Of those 173, 119 were with              
          counterparties that hailed from countries which the G-30 report             
          concluded had enforceable netting arrangements.52  Of the                   


          52 The G-30 report referenced legal memoranda prepared by                   
          counsel familiar with the laws of nine countries discussing                 
          issues of enforceability in Australia, Brazil, Canada, England,             
          France, Germany, Japan, Singapore, and the United States.  In               
          each case, netting arrangements were considered by counsel to               
          almost certainly be enforceable in bankruptcy or insolvency                 
                                                             (continued...)           




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