LEXIS-NEXIS® Congressional Universe-Document
LEXIS-NEXIS® Congressional
Copyright 1999
Federal News Service, Inc.
Federal News Service
MARCH 25, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH: 5216 words
HEADLINE: PREPARED STATEMENT OF
DAVID WARREN
MANAGING DIRECTOR
MORGAN STANLEY DEAN WITTER
& CO., INC.
AND VICE-CHAIRMAN
THE BOND MARKET ASSOCIATION
ON BEHALF OF THE BOND MARKET ASSOCIATION
BEFORE THE
SENATE COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS
SUBJECT - HEARING ON BANKRUPTCY AND INSOLVENCY ISSUES
BODY:
I. Introduction
Certain financial transactions involve ongoing economic relationships or
commitments to be fulfilled in the future. For example, risk management tools
such as forward contracts and swaps are based on contractual agreements between
parties to transfer assets or payments at some future time. Repurchase
agreements, which are important sources of liquidity in the debt markets and,
to an increasing degree, in the equity markets, involve financial commitments
that must be fulfilled at a later date. In these important market activities
which can involve huge sums and concentrated exposures, the inability of one
party to exercise its contractual
"self-help" rights in the event of the insolvency of the other party could cause ripple
effects by undermining the financial condition of the non-bankrupt party (and
its counterparties) and the markets more generally.
Recognizing the important role of these transactions in capital formation and
market liquidity and the potential for a chain reaction of insolvencies should
nonbankrupt parties' contractual self-help rights be impaired, Congress has
included provisions in the
Bankruptcy Code and the bank insolvency laws that expressly protect the exercise of such
rights in the event of
bankruptcy or insolvency. However, it has been almost ten years since the last
legislative update to the safe-harbor provisions. The financial markets have
evolved and matured during that time in ways that leave various transactions
and parties subject to legal uncertainty. As more types of market participants
have engaged in a broader range of transactions, statutory inconsistencies have
surfaced that make it difficult to conclude that Congress's goal of minimizing
systemic risk has been fully achieved through the existing market safe harbors.
Important technical corrections are needed to minimize systemic
risk in light of market developments.
The
Bankruptcy Code should also be amended to protect and enhance the important role of the
asset-backed securitization process. Asset securitizations, which provide a
secondary market for mortgage, consumer, commercial and industrial loans and
other debt obligations, are multi-stage transactions where the integrity of
securities payment commitments rests on the finality of earlier transfers of
underlying assets. An efficient secondary market for debt obligations lowers
the cost of borrowing. Amendments to increase market efficiency and provide
comfort for investors will not only enhance the development of future
asset-backed securitizations, they will provide a safeguard against market
turmoil should a seller of financial assets become the subject of proceedings
under the
Bankruptcy Code and attempt to disrupt the cash flow on assets that were securitized.
Three bills currently pending
in Congress would substantially improve the statutory regime that governs
financial transactions when a party fails to meet its payment obligations: the
House and Senate versions of comprehensive
bankruptcy reform ("The Bankruptcy Reform Act of 1999," H.R. 833 and S. 625), and the
"Financial Contract Netting Improvement Act of 1999" (H.R. 1161). H.R. 833 and H.R. 1161 would harmonize the
Bankruptcy Code and bank insolvency laws governing swaps, repurchase agreements,
securities contacts, forward contracts, and commodity contracts. They would
also provide a safe-harbor in the
Bankruptcy Code for ABS transactions. S. 625 would amend only the
Bankruptcy Code provisions for financial contracts and includes the same ABS protections
as the House bills. The Bond Market Association urges Congress to enact the
full set of
bankruptcy and insolvency law changes that are needed to protect modem financial markets.
These
proposed changes should not raise sweeping new policy issues--they are entirely
consistent with many statutory provisions that have already been enacted, and
are in the nature of technical corrections.
II. The Current Safe Harbors Need to be Updated
A. Swap Agreements
Swap agreements are privately negotiated contracts between parties to exchange
payments under specified conditions. The parties' obligations are linked to
some index, commodity price, interest rate, currency or other indication of
economic value. In an interest rate swap, for example, two parties agree to
exchange payments based on some agreed upon notional principal amount. However,
principal does not typically change hands in a swap contract. It merely serves
as the reference for the calculation of the payments to be made.
The primary purpose of swaps is risk management. The universe of parties
actively engaged
in swaps is expansive and growing: banks, securities firms, mutual funds,
pension funds both public and private, manufacturing firms, and state and local
governments, just to name a few. Virtually all significant commercial
enterprises face certain risks that can be managed through the use of swaps. In
the example that follows, Party B attempts to manage its exposure to changes in
interest rates through the use of an interest rate swap: Example 1. Two parties
to an interest rate swap agree to exchange payments based on a $1 million
notional amount. Party A agrees to pay a fixed rate of seven percent, and Party
B agrees to make floating payments based on some market index. If payments are
exchanged once per year, Party A would pay
Party B $70,000 (seven percent of $1 million) and Party B would pay Party A
$40,000 in the first year (four percent of $1 million), assuming that the
floating rate index were four percent at the time of calculation. In practice,
the payments are netted so that Party A simply pays Party B $30,000, or $70,000
- $40,000. (In this example, Party B may have floating rate assets and fixed
rate liabilities, and it desires to hedge that mismatch. In this example, the
payment that Party B receives makes up for the reduced return Party B receives
on its floating rate assets, allowing it to satisfy its fixed rate liabilities.
Party A may be a dealer, who hedges its position by taking an offsetting
position, either in the swaps market or in
another fixed income market.)
The fundamental contractual terms in a swap for the exercise of remedies in the
event of
bankruptcy or insolvency provide for
"close- out,"
"netting" and foreclosure. Close-out involves the termination of future obligations
between the parties and the calculation of gain or loss. Netting involves
offsetting the parties' gains and losses to arrive at a net outstanding amount
payable by one party to the other. Foreclosure involves the use of pledged
assets to satisfy the net payment obligation. The ability to execute this
process swiftly is key to the financial markets and the solvency of
itsparticipants due to the potential exposure a counterparty in such
transactions has to market risks and the possibility of changes in the values
of financial contracts and collateral due to market movements. The inability of
a financial market participant to exercise these remedies promptly could impair
its liquidity and solvency. The following is
a basic example of the close-out, netting and foreclosure process: Example 2.
Party A and Party B enter into two interest rate swaps at different times (Swap
X and Swap Y). Both contracts contain provisions that allow for close-out,
netting and foreclosure and are in effect when Party A becomes insolvent.
At the time of Party A's insolvency, Party A's mark-to-market loss under the
terms of Swap X is $30 million and its mark-to-market gain under the terms of
Swap Y is $20 million. Through the process of close-out and netting, the swaps
are terminated and Party A owes Party B $10 million. If Party A had pledged $15
million of collateral to Party B, Party B would foreclose on the collateral,
use $10 million to satisfy Party A's
obligation, and return $5 million to Party A.
If Party A became subject to a proceeding under the
Bankruptcy Code, Party B would be entitled under current law (Sections 362(b)(17) and 560
of the
Bankruptcy Code) to exercise its self-help close-out, netting and foreclosure remedies as
described above. If Party A were an FDIC-insured bank that became subject to a
receivership (and Swaps X and Y were not transferred to a successor entity),
Party B would be entitled under the Federal Deposit Insurance Act to exercise
its self- help close-out, netting andforeclosure remedies as described above.
In either case, if Party B were unable to exercise such remedies, its liquidity
and solvency could be impaired, creating gridlock and posing the risk of
systemic problems. The swaps market has evolved since the protections for
interest rate and other
swaps were first put in place. Parties have learned to apply the principles of
risk management in many different ways that are not expressly covered under the
applicable definitions in the
Bankruptcy Code and the Federal Deposit Insurance Act. As a result, the markets in some
cases proceed under some degree of legal uncertainty regarding the
enforceability of certain contracts, even though they are economically
equivalent to other contracts that are expressly protected and pose the same
risks that Congress has sought in the past to avoid.
For example, if in the above hypothetical the two swaps were equity swaps in
which the payments were calculated on the basis of an equity securities index,
it is not entirely clear that the transactions would fall within the market
safe harbor in the
Bankruptcy Code or the Federal Deposit Insurance Act for
"swap agreements." If both of the parties were
"financial institutions" under the Federal Deposit Insurance Corporation Improvement Act or the Federal
Reserve Board's Regulation EE and the swap agreement were a
"netting contract," then Party B might (although it is not entirely clear) be able to exercise
close-out, netting and foreclosure rights in respect of the equity swap
transactions. If one of the parties were not a
"financial institution" or the contract did not constitute a
"netting contract" (for example, because it was governed by the laws of the United Kingdom), then
Party B could be subject, among other things, to the risk of
"cherry-picking"--the risk that Party A's trustee or receiver would assume Swap Y and reject
Swap X, leaving Party B with a $30 million claim (which would be undersecured
because of the impairment of netting) and to the risk that its foreclosure on
the collateral would be stayed indefinitely. This could impair Party B's
creditworthiness, which in
turn could lead to its default to its counterparties. The pending legislation
would minimize these risks by making clear that an equity swap is a
"swap agreement," entitled to the same market safe harbors as interest swap agreements.
B. Repurchase Agreements
Repurchase agreements, also known as
"repos," are contracts involving the sale and repurchase of securities or other
financial assets at predetermined prices and times. Although structured and
treated for legal purposes as purchases and sales, economically repos resemble
secured lending transactions. In economic terms, one participant in the repo
transaction (the
"seller") is borrowing cash at the same time that the other participant (the
"buyer") is receiving securities. The recipient of cash agrees to pay the cash--to
repurchase the securities--at a predetermined time and price, including a price
differential (the economic equivalent of interest). The buyer agrees to
purchase and later
resell the securities.
According to published reports, on an average day in 1998, nearly $1.4 trillion
in repos were outstanding between dealers of U.S. government and federal agency
securities, up from a daily average of $310 billion in 1988. Parties also
routinely engage in repo transactions involving non-agency mortgage-backed
securities, whole loans and other financial instruments. As a result of recent
legislative changes enacted as part of the National Securities Markets
Improvement Act and recent changes to federal marginregulations, repos may now
involve equity securities. Participants in the repo market are diverse,
including commercial banks, securities firms, thrifts, finance companies,
non-financial corporations, state and local governments, mutual and
money-market funds and the Federal Reserve Banks, among others. In
1984, Congress acted to protect certain types of repos from the insolvency of
market participants after the 1982 Lombard- Wall
bankruptcy court decision cast uncertainty on the ability of market participants to close
out their positions. According to the Senate Judiciary Committee report on the
1984 legislation, that decision had a distinct adverse effect on the financial
markets. At that time, Congress granted protection only to repos involving
certificates of deposit, eligible bankers' acceptances, and securities that are
direct obligations of, or that are fully guaranteed as to principal and
interest by, the federal government. In doing so, Congress expressly stated
that repos serve a vital role in reducing borrowing costs in the markets for
these securities and sought to encourage market participants to use repos with
confidence.
Unfortunately, the list of instruments protected by those 1984 amendments to
the
Bankruptcy Code has
grown outdated as market participants have entered into repos involving a wide
range of financial assets. Besides repurchase agreements on government and
federal agency securities, which are covered under the
Bankruptcy Code and Federal Deposit Insurance Act definitions of
"repurchase agreement," firms now actively engage in repurchase agreements on the foreign sovereign
debt of OECD countries, whole mortgage loans, and mortgage-backed securities of
many types. Under H.R. 833, H.R. 1161 and S. 625, each of these types of
repurchase agreements would be covered by the market safe harbors provided in
the
Bankruptcy Code (they are already covered by the Federal Deposit Insurance Act and
regulations thereunder). Market participants could then enter into such
transactions with greater confidence that they will be easily enforceable,
improving the liquidity and cost of financing in the markets for the underlying
instruments, and minimizing
systemic risk.
C. Securities Contracts, Forward Contracts and Commodity Contracts
Market participants enter into contractual arrangements for the sale of
securities and commodities where payment and delivery obligations are fulfilled
at some future date. Securities contracts, forward contracts, and commodity
contracts all can take many forms, but they can also be similar from an
economic perspective.
"Securities contracts" include forward purchases of securities, pursuant to which the parties agree
to exchange payments and securities at a fixed date in the future.
"Forward contracts" include privately negotiated arrangements where one party agrees to sell a
commodity to another party at a fixed price for delivery at a future date. The
terms of forward contracts can closely resemble those of futures contracts
(which are
"commodity contracts"). However, forward contracts are not traded on
commodity exchanges under standardized terms and the parties envision actual
delivery of the underlying commodity.
Despite the economic similarities of securities contracts, forward contracts
and commodity contracts, the
Bankruptcy Code and the Federal Deposit Insurance Act are inconsistent in their treatment
of these transactions. Under the Federal Deposit Insurance Act, any
counterparty can close out and net obligations under all securities contracts,
forward contracts or commodity contracts it may have outstanding with the
FDIC-insured bank in a liquidating receivership. However, if the falling
counterparty is a debtor subject to the
Bankruptcy Code, the enforceability of close-out provisions depends on a number of
factors, including the type of counterparty, and the type of contract involved.
In order to close out and net
"securities contracts," the non-bankrupt counterparty must be a
"stockbroker,"
"financial institution" or
"securities clearing agency."
In order to close out and net
"forward contracts," the non-defaulting party must qualify as a
"forward contract merchant." A few examples illustrate these differences:
Example 3. Party A, a mutual fund, and Party B, a securities dealer, have two
outstanding contracts for the purchase of securities, one that is in-themoney
to Party A, one that is out-of-the-money to Party A. If Party B becomes the
subject of proceedings under the
Bankruptcy Code, Party A would not be able to close out the contracts and net its
obligations to Party B under the out-of-the-money contract against Party B's
obligations under the in-the-money contract (unless it had acted through a bank
agent). However, if it is Party A that becomes the subject of proceedings under
the
Bankruptcy Code, Party B would be able to close
out the transactions and net its obligations. This is because Section 555 of
the
Bankruptcy Code allows liquidation of securities contracts only by stockbrokers,
financial institutions and securities clearing agencies, none of which includes
the mutual fund (unless it had acted through a bank agent).
Example 4. Now assume that in the above example Party B is an FDICinsured
depository institution.
If Party B becomes the subject ofreceivership proceedings and the securities
contracts with Party A are not transferred to a successor institution, Party A
will be able to close out the transactions and net the obligations thereunder.
This is because the Federal Deposit Insurance Act, since 1989, contains no
counterparty restrictions.
Example 5. Party A, the mutual fund, and Party B, an affiliate of a securities
dealer, have two outstanding forward foreign exchange contracts. If Party B
becomes the subject of proceedings under the
Bankruptcy Code, Party A would be able to close out and net the foreign exchange
transactions. This is because Section 556 of the
Bankruptcy Code allows liquidation of
"forward contracts" (the foreign exchange transactions) by forward contract merchants, a
classification that includes the mutual fund. (Note that the forward foreign
exchange contracts would also be
"swap agreements," and the mutual fund, as a
"swap participant," could exercise its rights on that basis as well. Other
"forward contracts" would not qualify as
"swap agreements.")
Thus, parties of similar size who enter the markets with equal frequency and in
the same manner enjoy different degrees of protection under the
Bankruptcy Code and the Federal Deposit Insurance Act. This makes no sense from the point
of view of the reduction of systemic risk -- the failure of these market
players could trigger the same kind of chain reaction that a bank, broker-dealer or clearing agency failure could trigger. The pending legislation would
improve the current situation by making certain technical definitional changes
under the
Bankruptcy Code (to bring it closer to the Federal Deposit Insurance Act). The amendments
would expand the universe of counterparties whose contractual rights would be
enforceable. In addition to stockbrokers, financial institutions, registered
investment companies and securities clearing agencies, large and sophisticated
market participants would be able to close out their securities contracts,
forward contracts and commodity contracts against
Bankruptcy Code debtors. Such counterparties would be defined as
"financial participants" under the
Bankruptcy Code through certain quantitative tests modeled on the Federal Reserve Board's
Regulation EE. Once amended, the counterparty limitations under the
Bankruptcy Code would have a more rational scope than they do under current law.
D. Cross-Product Netting
Financial market participants
often have a wide range of transactions outstanding with one another at any
given time. Thus, a given party's exposure to the risk of default by another
party may be understood only by considering the total value of the payments
that party expects to receive and pay under all of the various contracts. The
Federal Deposit Insurance Act reflects an understanding of this and permits the
netting of obligations stemming from one type of
"qualified financial contract" against obligations stemming from another type of"qualified financial contract." This practice, known as
"cross- product" netting, permits more rational risk management practices and allows market
participants to resolve whatever problems arise from the insolvency of one of
their counterparties in a more orderly fashion. Cross-product netting also
reduces thelikelihood of systemic risk, as it allows the non-bankrupt
counterparty to crystallize its
exposure and not be treated as a secured creditor with an interest in cash
collateral subject to the automatic stay. Cross-product netting is also
permitted under the
Bankruptcy Code, but to a lesser degree. Parties can net their obligations under
securities contracts, forward contracts and commodity contracts against one
another. It is unclear whether cross-product netting is permitted, however,
when the contracts involved are swaps and repurchase agreements.
Example 6. Party A, a securities dealer, and Party B, a large corporation, have
an outstanding securities contract that upon close- out is profitable for Party
A. The parties also have an outstanding forward contract that upon close-out is
profitable for Party B. When Party B becomes the subject of a proceeding under
the
Bankruptcy Code, Party A would be able to close out each of the
contracts and offset its obligation to pay Party B under the forward against
Party B's obligation to Party A under the securities contract.
Example 7. Party A and Party B have an outstanding swap that upon close-out is
profitable for Party A. The parties also have an outstanding repurchase
agreement under which Party A holds securities purchased from Party B that upon
close-out is profitable to Party B (i.e., the value of the securities exceeds
the repurchase price). If Party B becomes the subject of proceedings under the
Bankruptcy Code, Party A would not clearly be able to offset the excess repo proceeds
against Party B's outstanding obligation under the swap. At worst, Party A
would be treated as a secured creditor with a security interest in the repo
proceeds. Its rights could, however, be subject to the automatic stay, thereby
impairing its
liquidity and creating the potential for systemic risk.
There is no plausible rationale for treating cross-product netting between
securities, forward and commodity contracts differently from cross-product
netting between those contracts, swap agreements and repurchase agreements.
These anomalies emerged over time, as various protective provisions were added
to the
Bankruptcy Code to protect various types of markets. (Because the
"qualified financial contract" provisions of the Federal Deposit Insurance Act were enacted at the same time,
no such anomalies exist in those provisions.) However, the capital markets have
grown and matured to such an extent that various types of market participants
now engage in many types of transactions, and it is time for the market safe
harbors to be rationalized and made consistent in their application to all
financial products for all participants.
Wider and more certain cross-product netting in
cases of
bankruptcy should allow parties to enter into additional types of transactions with the
same counterparty without necessarily increasing, on a net basis, their overall
credit exposure or risk to the markets as a whole. Indeed, some cross-product
transactions will serve to reduce a counterparty's overall risk, facilitating
better risk management and reducing overall risk in the financial markets.
III. Mortgage- and Asset-backed Securities
The process of assembling pools of financial assets and selling securities with
payments derived from the assets' cash flows is known as
"securitization." Almost any financial asset can be securitized. The earliest examples were home
mortgage loans, but today financial services finns securitize car loans and
leases, credit card receivables, business loans and many other assets
generating current or future cash flows. The proceeds from sales of
securities supported by those assets make their way back into the capital
markets and become available for new lending to homeowners, car owners,
consumers, businesses and myriad other borrowers. A larger supply of lendable
capital means that home buyers, car buyers, consumers and companies can all
borrow at lower interest costs. A simple example demonstrates the process of
financial asset securitization:
Example 7. Party O originates mortgage loans with a total principal amount
of$100 million and sells the whole loans to a special-purpose vehicle (an
"SPV"). The SPV issues mortgage-backed securities ("MBS"), the payments on which are supported by cash flows from the mortgage loans.
As borrowers make principal and interest payments on their mortgage loans,
these payments pass through a servicer and eventually are distributed to the
MBS investors. The proceeds of the sale of the loans by Party O to the SPV are
available for new loans to home buyers.Certain types of mortgage-backed and
asset-backed transactions raise issues under the
Bankruptcy Code that make them more costly or difficult to complete. The central issue in
such situations is the risk that securitized assets transferred to a
special-purpose vehicle, which then issues securities backed by such assets,
will be considered part of the
bankruptcy estate of the party selling them into the pool if that seller becomes
insolvent. Such treatment could subject the cash flows from the securitized
assets to the automatic stay and inhibit the timely distribution of principal
and interest payments to investors in the subsequently issued asset-backed
securities. It could also subject the pool of transferred assets to attack by a
bankruptcy trustee who might seek to reclaim them for the bankrupt's estate for the
benefit of
general creditors, denying beneficial holders of asset- backed securities the
primary source of repayment that was intended to be provided by these
securitized assets. Consider the following transaction:
Example 8. Party A originates mortgage loans with a total principal amount of
$100 million and sells the loans to Party B. Party B sells two classes of
asset-backed securities based on the pool. The Class A securities, totaling $90
million, have a senior claim on the cash flows generated by the mortgage loans
and receive an investment-grade credit rating. The Class B securities, totaling
$10 million, are subordinated to the Class A securities and not rated
investment-grade. Assume Party B obtained the mortgage loans from Party A in
exchange for (i) the $90 million raised through the sale of the
Class A securities and (ii) the Class 16 B certificates.
If Party A becomes insolvent, Party A (as debtor-in-possession) or its trustee
could attempt to recharacterize the sale of the mortgage loans as a pledgeto
secure a financing, based on Party A's retention of the Class B securities. If
it were successful, notwithstanding that it had received fair value at the
outset of the transaction and the reasonable expectations of the investors in
the Class A securities, distribution of the principal and interest payments on
the loans to the investors would be subject to the automatic stay, jeopardizing
timely payment to the Class A investors. Such a result would not only harm the
particular investors in question, it could have a material, negative effect on
the mortgage-backed and asset-backed securities markets more generally.
In order to obtain sales treatment under the relevant accounting
standards, participants in mortgage-backed and asset-backed securitization
transactions must obtain assurances from counsel that the sale of assets will
be final under applicable
bankruptcy law. Such legal advice is referred to as a
"true sale opinion." Unfortunately, there is a lack of guiding judicial precedent regarding what
constitutes such a true sale of assets. The considerations in the analysis are
highly subjective and depend on a qualitative assessment of a wide variety of
facts and circumstances. For these and other reasons, any true sale opinion
will generally be a reasoned one, with various assumptions as to factual
matters and conclusions that introduce an unnecessary degree of legal
uncertainty in the asset- backed market. As a result, for some types of
transactions, true sale opinions can be extremely difficult, costly, and in a
few cases, impossible to
render.The FDIC recently released for comment a proposed Policy Statement that
would clarify that, with respect to certain securitizations by FDIC-insured
institutions, the FDIC would not seek to reclaim the assets the subject of the
securitization. In particular, the Policy Statement
"provides that subject to certain conditions, the FDIC will not attempt to
reclaim, recover, or recharacterize as property of the institution or the
receivership estate.., the financial assets transferred.., in connection with
the securitization." 63 Fed. Reg. 71926 (December 30, 1998). Similar action is needed to cover
transfers by market participants who later become debtors under the
Bankruptcy Code. In an effort to clarify the rights of investors in asset-backed
securities and bring the benefits of securitization to a broader spectrum of
market activity, H.R. 833 includes a series of amendments to the
Bankruptcy Code that would specifically exempt
certain transferred assets from a debtor's
bankruptcy estate and clarify whatever
"true sale" confusion may exist. The amendments would be narrowly tailored to apply only
to eligible assets transferred as part of a bona fide securitization involving
the issuance of securities rated investment grade by at least one nationally
recognized rating organizaton. Through a series of definitions, the proposed
amendments would exclude from a debtor's estate any asset
"to the extent that such eligible asset was transferred by the debtor, before
the date of commencement of the case, to an eligible entity in connection with
an asset-backed securitization."
These changes would not only reduce transaction costs for future mortgage- and
asset-backed securitizations, they would minimize the likelihood that an
insolvent debtor could attempt to reclaim already- securitized assets in a
proceeding under the
Bankruptcy Code,
notwithstanding the structural safeguards designed to avoid such a result. Even
if such a debtor were not successful, the possibility of recharacterization
could have a significant adverse impact on the markets in mortgage- and
asset-backed securities.
IV. Conclusion
The above examples illustrate the need for Congress to enact the financial
contract provisions of H.R. 833, H.R. 1161 and S. 625, which would make
important, but highly technical, changes to the
Bankruptcy Code and the Federal Deposit Insurance Act. These changes are consistent with
the existing market safe harbors in the
Bankruptcy Code and the Federal Deposit Insurance Act, will encourage broader use of
sound risk management techniques and help to minimize overall systemic risk.
END
LOAD-DATE: March 26, 1999