Overview of Statutory Authority and Purpose Sample Clauses

Overview of Statutory Authority and Purpose. The FDIC is issuing this final rule under its authorities under the FDI Act (12 U.S.C. 1811 et seq.), including its general rulemaking authorities.61 The FDIC views the final rule as consistent with its overall statutory mandate.62 An overarching purpose of the final rule is to limit disruptions to an orderly resolution of a GSIB and its subsidiaries, thereby furthering financial stability generally. Another purpose is to enhance the safety and soundness of covered FSIs by addressing the two main issues raised by covered QFCs (noted above): cross-border recognition and cross-default rights. As discussed above, the exercise of default rights by counterparties of a failed GSIB can have significant impacts on financial stability. These financial stability concerns are necessarily intertwined with the safety and soundness of covered FSIs and the banking system—the disorderly exercise of default rights can produce a sudden, contemporaneous threat to the safety and soundness of individual institutions, including insured depository institutions, throughout the system, which in turn threatens the system as a whole. Furthermore, the failure of multiple insured depository institutions in the same time period could stress the DIF, which is managed by the FDIC. While a covered FSI may not itself be considered systemically important, as part of a GSIB, the disorderly resolution of the covered FSI could result in a significant negative impact on the GSIB. Additionally, the application of the final rule to the QFCs of covered FSIs should 61 See 12 U.S.C. 1819. 62 The FDIC is (i) the primary Federal supervisor for SNMBs and State savings associations; (ii) insurer of deposits and manager of the DIF; and (iii) the resolution authority for all FDIC-insured institutions under the Federal Deposit Insurance Act and for large complex financial institutions under Title II of the Xxxx-Xxxxx Act. See 12 U.S.C. 1811, 1816, 1818, 1819, 1820(g), 1828, 1828m, 1831p-1, 1831u, 5301 et seq. avoid creating what may otherwise be an incentive for GSIBs and their counterparties to concentrate QFCs in entities that are subject to fewer counterparty restrictions. II. Restrictions on QFCs of Covered FSIs

Overview of Statutory Authority and Purpose. The FDIC is issuing this proposed rule under its authorities under the FDI Act (12 U.S.C. 1811 et seq.), including its general rulemaking authorities.43 The FDIC views the proposed rule as consistent with its overall statutory mandate.44 An overarching purpose of this proposed rule is to limit disruptions to an orderly resolution of a GSIB and its subsidiaries, thereby furthering financial stability generally. Another purpose is to enhance the safety and soundness of covered FSIs by addressing the two main issues raised by covered QFCs (noted above): cross-border recognition and cross-default rights. As discussed above and in the FRB NPRM, the exercise of default rights by counterparties of a failed GSIB can have significant impacts on financial stability. These financial stability concerns are necessarily intertwined with the safety and soundness of covered FSIs and the banking system—the disorderly exercise of default rights can produce a sudden, contemporaneous threat to the safety and soundness of individual institutions, including insured depository institutions, throughout the system, which in turn threatens the system as a whole. Furthermore, the failure of multiple insured depository institutions in the same time period can stress the DIF, which is managed by the FDIC. Covered FSIs could themselves be a contributing factor to financial destabilization due to the interconnectedness of these institutions to each other and to other entities within the financial system. While the covered FSI may not itself be considered systemically important, as part of a GSIB, the disorderly resolution of the covered FSI could result in a significant negative impact