It is widely acknowledged by both industry regulators and market participants that the netting of FX transactions reduces settlement risk and allows intraday funding to be managed more precisely. Yet the percentage of netted transactions is still surprisingly low. What are the operational challenges to the netting process and how can these be overcome?
Highlighted as a concern by the Bank for International Settlements (BIS) in its 2019 Triennial Survey1, the issue of FX…
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