Definition of Qualified Financial Contracts

The Federal Deposit Insurance Corporation (FDIC or Corporation) has adopted a rule to include spot and other short-term foreign exchange agreements and repurchase agreements on qualified foreign government securities within the definition of ``qualified financial contracts'' under the Federal Deposit Insurance Act (FDI Act). The FDI Act authorizes the FDIC to expand the definition of qualified financial contract by promulgation of regulations to include agreements similar to those currently identified as qualified financial contracts within the FDI Act. The FDIC has determined that spot and other short-term foreign exchange agreements are similar to swap agreements, which are included within the qualified financial contract provisions of the statute and that repurchase agreements on qualified foreign government securities are similar to those repurchase agreements already recognized as qualified financial contracts under the statute.