By Marc Bayle de Jessé, CEO, CLS The Bank for International Settlements’ (BIS) Quarterly Review published in December 2019 concluded that FX settlement risk is on the rise due to a significant portion of the global FX market being settled without protection. According to the BIS data, the volume of trades settled with PvP protection […]
As Global Head of Foreign Exchange Operations at Citi, with over 20 years of background at the bank, Leigh Meyer has an unrivalled perspective of FX operations. We asked him to comment on aspects of netting settlement risk. How would you describe the current state of settlement risk in the global FX market? For the […]
Payment versus payment (PvP) is the ideal solution for eradicating settlement risk but where this isn’t (yet) possible the market needs to consider all options and technologies. We spoke to Andrew Harvey, Managing Director Europe of the GFMAs Global FX Division. The Global Financial Markets Associations (GFMAs) Global Foreign Exchange Division (GFXD) was formed in […]
By Brian Charlick, Principal Consultant at CGI During the past decade we have witnessed a significant shift in the payments and banking landscape. A drive to mobile banking, fintechs, younger tech-savvy demographics and new global financial instruments have driven up payments volumes. This pattern of increased volumes has coincided with ever increasing demands for payments […]
By Richard Willsher SWIFT’s Global Payments Innovation (gpi) messaging has become the norm for cross-border interbank payments but the innovation continues. Launched in 2017 to offer a fast, transparent and secure cross-border payment platform, gpi provides customers with traceability of their payments. The service enables predictable settlement times, transparent bank fees and FX rates. The […]
Beyond settlement risk mitigation for those CLS qualifying currencies there’s a world of exposure that remains in the FX market. Forwards, swaps and options, counterparties that currently rely on prime brokers for credit support and emerging market currencies – all these require reliance on credit judgement, tenors and collateralisation that can leave much to chance. […]
By Maryanne Morrow, CEO and Founder 9th Gear Technologies Settlement risk is unnecessary! In 1974, settlement risk came to the forefront when the German bank, Bankhaus Herstatt, failed to make its corresponding dollar payments after receiving Deutsche Marks from their counterparties. This created a cascading effect causing more banks to stop making payments and the […]
FX settlement risk is on the increase, stemming from long-running issues in the industry coupled with new factors, including the ongoing Covid-19 crisis. We spoke to Arjun Jayaram, CEO and Founder of Baton Systems, about the role of fintechs and emerging technologies in helping address settlement risk in the trading lifecycle. The Bank for International […]
By Sam Romilly, FX Global Market Management, SWIFT The growing amount of FX settlement risk is of concern to all in the financial industry and the nature of the challenge in its size, and complexity, is significant. The industry settles over $18 trillion each day1 resulting from a variety of FX instruments, each with their own […]
CLS already settles a vast volume of FX transactions. We spoke to its CEO, Marc Bayle de Jessé about its role and how it can help to address the rising tide of settlement risk that falls outside its current scope. CLS’s settlement service, CLSSettlement, went live in September 2002 in the wake of a number […]
The FX Global Code is still relatively young. So how well does it address settlement risk as the FX market grows and changes? To find out we spoke to Guy Debelle, Deputy Governor of the Reserve Bank of Australia, Chair of the Global Foreign Exchange Committee and the Code’s author. The GFXC’s June meeting spent […]
The Bank for International Settlements’ (BIS) Triennial Central Bank Survey is a key bellwether of the state of the global foreign exchange market. We explore the findings of the latest survey with Takeshi Shirakami, Deputy Head of Secretariat of the BIS-hosted Committee on Payments and Market Infrastructures (CPMI), to examine what can be done about […]
By Brian Charlick, Principal Consultant at CGI Settlement risk within the forex market is beginning to rise once again. According to BIS, the reason is attributable to the rise in Non CLS settled currency trading as a percentage of the entire forex market. Indeed the size of the non settled forex market has increased from […]
By Sam Romilly, FX Global Market Management, SWIFT SWIFT commissioned this e-Forex magazine supplement because of the size of the outstanding risk, and the complexity of the problem. Our objective was to bring together some of the top practitioners, solution providers, and thought leaders to really dissect the problem, to examine what solutions exist today, […]
