Performance and resilience to liquidity disruptions in interdependent RTGS payment systems

Size: px
Start display at page:

Download "Performance and resilience to liquidity disruptions in interdependent RTGS payment systems"

Transcription

1 Sandia National Laboratories Performance and resilience to liquidity disruptions in interdependent RTGS payment systems Fabien Renault 1 Morten L. Bech 2 Walt Beyeler 3 Robert J. Glass 3 Kimmo Soramäki 4 1 Banque de France 2 Federal Reserve Bank of New York 3 Sandia National Laboratories 4 Helsinki University of Technology Joint Banque de France / European Central Bank conference on "Liquidity in interdependent transfer systems" Paris, 9 June 28 The views expressed in this presentation are those of the authors and do not necessarily reflect those of their respective institutions 1

2 Motivation The 21 Group of Ten Report on Consolidation in the Financial Sector (the Ferguson report) noted a possible increased interdependence between the different systems due to: The emergence of global institutions that participate to many systems The emergence of global service providers offering services to many systems The development of DvP procedures linking RTGS and SSS The development of CLS The report suggested that these trends might accentuate the role of payment and settlement systems in the transmission of disruptions across the financial system. To complement this previous work, the CPSS (Committee on Payment and Settlement Systems) commissioned a working group to: describe the different interdependencies existing among the payment and settlement systems of CPSS countries analyze the risk implications of the different interdependencies 2

3 Motivation Could a modeling approach provide any useful additional information to the regulators? So far, payment and settlement system modeling has been mainly limited to a single system, with a few exceptions We want to model the interactions between two payment systems and understand how interdependencies arise We wish to understand how disruptions in one system manifest in the other System-based Interdependencies Institution-based Interdependencies Environmental Interdependencies System System System System System System Dealt with in this presentation Financial Institution IT service provider 3

4 Coupled RTGS model Model description Two RTGS systems in two different currencies: $ and RTGS $ Extended core A 5 A 23 A i A 97 Both systems are similar in structure with 1 banks A2 A 6 A 1 A 2 A 3 Core E1 E 2 E 3 A 4 A22 A 21 Smaller $ local players Six global banks. Top three banks in each system have a presence also in the other system FX market The global banks make FX trades (at constant exchange rate) among each other E 2 A1 A 2 Core E 1 E 2 A 3 E4 E i E 97 E 23 E 22 Smaller local players All banks make local payments E 3 E 6 Extended core E 5 RTGS E 21 4

5 Coupled RTGS model Model description Payment instructions arrive according to a non-homogenous Poisson process intuition: customers who have received funds issue payments more frequently than bank customers who have already sent many payments FX trades arrival is similar as above, now taking into account balances in both currencies E.g. banks with high euro positions are likely to sell euro and vice versa Those two systems are linked Via the dual participation of some global banks that can make FX trades (institution-based interdependency) Via a possible PvP (Payment versus Payment) constraint on the FX trades (system-based interdependency), the alternative being a non-pvp settlement 5

6 Correlation dynamics Local $ payment orders High liquidity PvP or non-pvp FX trades $ legs of FX trades legs of FX trades Correlation:.22 (institution-based interdependency) Local payment orders Local $ payment orders $ legs Congestions and cascades Settled payments Low liquidity non-pvp FX trades legs Local payment orders Congestions and cascades Settled payments Correlation: -.2 (none) Low liquidity PvP Local $ payment orders $ legs FX trades legs Local payment orders Congestions and cascades Congestions and cascades Settled payments PvP link Settled payments Correlation:.83 (system-based interdependency) 6

7 Summary of main results PvP increases queues eliminates exposures Lower liquidity increases queues Increases exposures (in case of non-pvp) Liquidity differences in the two systems Reducing liquidity in one system increases queuing in the other (in case of PvP) Banks selling the more liquid currency face higher exposures (in case of non- PvP) Higher priority for FX trades Decreases queues in the more liquid system (in case of PvP) Does not affect queues when both systems have same liquidity Substantially reduces exposures (in case of non-pvp) 7

8 An operational disruption affects a significant local bank The affected bank does not participate in RTGS $, nor engage in FX transactions The affected bank is unable to submit its local payments for a certain duration The affected bank acts as a liquidity sink for RTGS To which extent will the disruption affect RTGS $? Four different cases: PvP or non-pvp High Liquidity or Low Liquidity (the same in both systems) What are the channels of propagation through which the crisis spreads from one RTGS to the other? 8

9 2 A B C D E F G H 18 Settlem ent Rate (Payments/Tim e) PvP, High Liquidity PvP High Liquidity 9

10 2 A B C D E F G H 18 Settlem ent Rate (Payments/Tim e) PvP, High Liquidity PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) 1

11 2 A B C D E F G H 18 Settlem ent Rate (Payments/Tim e) PvP, High Liquidity PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots 11

12 2 18 A B C D E F G H Period A Steady state 16 Settlem ent Rate (Payments/Tim e) PvP, High Liquidity PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots 12

13 Settlem ent Rate (Payments/Tim e) A B C D E F G H Period A Steady state Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity PvP, High Liquidity PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots 13

14 Settlem ent Rate (Payments/Tim e) A B C D E F G H Period A Steady state Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity Period C RTGS $ down to local activity PvP, High Liquidity PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots 14

15 Settlem ent Rate (Payments/Tim e) A B C D E F G H PvP High Liquidity PvP, High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots Period A Steady state Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity Period C RTGS $ down to local activity Period D Because of the queuing of FX trades (PvP), customers have lower $ funds and make fewer $ local payments Period E-F Queued local payments settle Queued FX trades settle Period G Return to equilibrium generates extra trades 15

16 Settlem ent Rate (Payments/Tim e) A B C D E F G H PvP High Liquidity PvP, High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots Period A Steady state Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity Period C RTGS $ down to local activity Period D Because of the queuing of FX trades (PvP), customers have lower $ funds and make fewer $ local payments Period E-F Queued local payments settle Queued FX trades settle Period G Return to equilibrium generates extra trades 16

17 Settlem ent Rate (Payments/Tim e) A B C D E F G H PvP High Liquidity PvP, High Liquidity Outage: settlement rate in RTGS $ decreases (-5 %) Recovery: settlement rate in RTGS $ overshoots Period A Steady state Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity Period C RTGS $ down to local activity Period D Because of the queuing of FX trades (PvP), customers have lower $ funds and make fewer $ local payments Period E-F Queued local payments settle Queued FX trades settle Period G Return to equilibrium generates extra trades 17

18 2 A B C D E 18 Settlement Rate (Payments/Time) PvP, Low Liquidity PvP Low Liquidity 18

19 2 A B C D E 18 Settlement Rate (Payments/Time) PvP, Low Liquidity PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-65 %) 19

20 2 A B C D E 18 Settlement Rate (Payments/Time) PvP, Low Liquidity PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-65 %) Recovery: settlement rate in RTGS $ overshoots (reaches maximum rate) 2

21 Settlement Rate (Payments/Time) A B C D E PvP, Low Liquidity PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-65 %) Recovery: settlement rate in RTGS $ overshoots (reaches maximum rate) Period B balances vanish local payments are queued Both legs of FX trades are queued, RTGS $ deprived of FX activity Period C The queuing of FX trades decreases $ deposits. Agents are uncertain about their $ position, fewer $ local payments emitted The distribution of $ deposits is brought out of equilibrium because of the disruption. In this low liquidity context, this causes $ local payments to be queued Period D Queued local payments settle Queued FX trades settle Queued $ local payments settle Period E 21 Return to equilibrium marginally affects settlement rate

22 2 A B C D E F G 18 Settlement Rate (Payments/Time) non-pvp, High Liquidity Non-PvP High Liquidity 22

23 2 A B C D E F G 18 Settlement Rate (Payments/Time) non-pvp, High Liquidity Non-PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-17 %) Recovery: no overshoot in RTGS $ 23

24 2 A B C D E F G 18 Settlement Rate (Payments/Time) non-pvp, High Liquidity Non-PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-17 %) Recovery: no overshoot in RTGS $ 24

25 Settlement Rate (Payments/Time) A B C D E F G Non-PvP High Liquidity Outage: settlement rate in RTGS $ decreases (-17 %) Recovery: no overshoot in RTGS $ non-pvp, High Liquidity Period B balances vanish local payments are queued leg of FX trades are queued $ leg of FX trades still settle Period C The queuing of local payments decreases deposits. Agents are uncertain about their position, fewer FX trades emitted. RTGS $ is deprived from FX activity Period D Only local activity in RTGS $ Period E Queued local payments settle Queued leg of FX trades settle Period F Return to equilibrium generates extra trades 25

26 A B C D E F 2 18 Settlement Rate (Payments/Time) non-pvp, Low Liquidity Non-PvP Low Liquidity 26

27 A B C D E F 2 18 Settlement Rate (Payments/Time) non-pvp, Low Liquidity Non-PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-25 %) 27

28 A B C D E F 2 18 Settlement Rate (Payments/Time) non-pvp, Low Liquidity Non-PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-25 %) Recovery: settlement rate in RTGS $ overshoots 28

29 Settlement Rate (Payments/Time) A B C D E F non-pvp, Low Liquidity Non-PvP Low Liquidity Outage: settlement rate in RTGS $ decreases (-25 %) Recovery: settlement rate in RTGS $ overshoots Period B balances vanish local payments are queued leg of FX trades are queued $ leg of FX trades still settle Period C The queuing of local payments decreases deposits. Agents are uncertain about their position, fewer FX trades emitted. RTGS $ is deprived from FX activity Period D Only local activity in RTGS $ The distribution of $ deposits is brought out of equilibrium because of the disruption. In this low liquidity context, this causes $ local payments to be queued Period E Queued local payments settle Queued FX trades settle 29 Queued $ local payments settle

30 Exposure (Dollars or Euros Owed) Dollars Owed Euros Owed (maximum at 11.) non-pvp, High Liquidity Non-PvP High Liquidity, FX exposures 3

31 Exposure (Dollars or Euros Owed) Dollars Owed Euros Owed (maximum at 11.) non-pvp, High Liquidity Non-PvP High Liquidity, FX exposures Outage: huge increase in owed (1 times normal exposures) 31

32 Exposure (Dollars or Euros Owed) Dollars Owed Euros Owed (maximum at 11.) non-pvp, High Liquidity Non-PvP High Liquidity, FX exposures Outage: huge increase in owed (1 times normal exposures) Recovery: large increase in $ owed (15 time normal exposure) 32

33 Cross-currency channels of disruption propagation Channel 1: Low balances at the CB prevent settlement of leg of FX transactions (PvP) or create FX exposures (non-pvp) 33

34 Cross-currency channels of disruption propagation Channel 1: Low balances at the CB prevent settlement of leg of FX transactions (PvP) or create FX exposures (non-pvp) Settlem ent Rate (Payments/Tim e) PvP: All FX settlement activity stops, RTGS $ is deprived from FX settlement activity PvP, High Liquidity 34

35 Cross-currency channels of disruption propagation Channel 1: Low balances at the CB prevent settlement of leg of FX transactions (PvP) or create FX exposures (non-pvp) Settlem ent Rate (Payments/Tim e) PvP: All FX settlement activity stops, RTGS $ is deprived from FX settlement activity Because of the queuing of FX trades (PvP), customers have lower $ funds and make fewer $ local payments PvP, High Liquidity 35

36 Cross-currency channels of disruption propagation Channel 1: Low balances at the CB prevent settlement of leg of FX transactions (PvP) or create FX exposures (non-pvp) Exposure (Dollars or Euros Owed) 3 Dollars Owed Euros Owed (maximum at 11.) non-pvp, High Liquidity PvP: All FX settlement activity stops, RTGS $ is deprived from FX settlement activity Because of the queuing of FX trades (PvP), customers have lower $ funds and make fewer $ local payments Non-PvP: Very high exposures (unsettled legs) during crisis 36

37 Cross-currency channels of disruption propagation Channel 2: Low customer funds lead to fewer emitted FX trades Banks customers liquidity is trapped within queued payments. Therefore, customers emit fewer FX trades 37

38 Cross-currency channels of disruption propagation Channel 2: Low customer funds lead to fewer emitted FX trades Banks customers liquidity is trapped within queued payments. Therefore, customers emit fewer FX trades Settlement Rate (Payments/Time) This leads to RTGS $ being eventually deprived of FX activity, even in the non-pvp case non-pvp, High Liquidity 38

39 Cross-currency channels of disruption propagation Channel 3: As not all banks are similarly affected, the system becomes unbalanced The FX banks for which the disrupted bank is an important counterparty see their level of customer funds decrease more rapidly. These banks become net buyers ($ sellers) on the FX market. RTGS $ becomes unbalanced. 39

40 Cross-currency channels of disruption propagation Channel 3: As not all banks are similarly affected, the system becomes unbalanced The FX banks for which the disrupted bank is an important counterparty see their level of customer funds decrease more rapidly. These banks become net buyers ($ sellers) on the FX market. RTGS $ becomes unbalanced. Settlement Rate (Payments/Time) Low Liquidity: this leads to the queuing of several $ local payments, even in the non-pvp case non-pvp, Low Liquidity 4

41 Cross-currency channels of disruption propagation Channel 3: As not all banks are similarly affected, the system becomes unbalanced The FX banks for which the disrupted bank is an important counterparty see their level of customer funds decrease more rapidly. These banks become net buyers ($ sellers) on the FX market. RTGS $ becomes unbalanced. Settlement Rate (Payments/Time) Low Liquidity: this leads to the queuing of several $ local payments, even in the non-pvp case And to an overshoot at recovery, even in non- PvP case non-pvp, Low Liquidity 41

42 Cross-currency channels of disruption propagation Channel 3: As not all banks are similarly affected, the system becomes unbalanced The FX banks for which the disrupted bank is an important counterparty see their level of customer funds decrease more rapidly. These banks become net buyers ($ sellers) on the FX market. RTGS $ becomes unbalanced. Exposure (Dollars or Euros Owed) 3 Dollars Owed Euros Owed (maximum at 11.) non-pvp, High Liquidity Low Liquidity: this leads to the queuing of several $ local payments And to an overshoot at recovery, even in non- PvP case Non-PvP: This creates a peak in $ owed exposures at recovery, event at high 42 liquidity

43 Conclusions A simple model of interconnected RTGS was developed During normal operation, the two RTGS are shown to be interdependent When a liquidity crisis affects one RTGS, the crisis propagates to second RTGS in all considered cases PvP: sharp decrease in activity (local and FX) in second RTGS Non-PvP: Decrease in activity in second RTGS due to fewer FX trades emitted At low liquidity, local payments in second RTGS are also affected Large increase of FX exposures during crisis and recovery 43

Interdependencies among payment and settlement systems Overview of forms and challenges for risk management

Interdependencies among payment and settlement systems Overview of forms and challenges for risk management Interdependencies among payment and settlement systems Overview of forms and challenges for risk management Denis Beau Chairman of the CPSS working group on system interdependencies Bank of England/ECB

More information

Contagion in Payment and Settlement Systems

Contagion in Payment and Settlement Systems Contagion in Payment and Settlement Systems Matti Hellqvist Financial Markets and Statistics Dept. - Bank of Finland Paper presented at the Expert Forum on Advanced Techniques on Stress Testing: Applications

More information

ACI Operations Certificate (010) Sample Questions

ACI Operations Certificate (010) Sample Questions ACI Operations Certificate (010) Sample Questions Setting the benchmark in certifying the financial industry globally 8 Rue du Mail, 75002 Paris - France T: +33 1 42975115 - F: +33 1 42975116 - www.aciforex.org

More information

How To Understand The Interdependencies Of Payment And Settlement Systems In Hong Kong

How To Understand The Interdependencies Of Payment And Settlement Systems In Hong Kong Interdependencies of payment and settlement systems: the Hong Kong experience by the Financial Infrastructure Department Payment and settlement systems around the world have become more interdependent

More information

MSc in FINANCE. FINANCIAL ENGINEERING May 2012. Settlement Risk. Giacomo Marchetti Massimiliano Morelli Vincenzo Raimondi

MSc in FINANCE. FINANCIAL ENGINEERING May 2012. Settlement Risk. Giacomo Marchetti Massimiliano Morelli Vincenzo Raimondi MSc in FINANCE FINANCIAL ENGINEERING May 2012 Settlement Risk Giacomo Marchetti Massimiliano Morelli Vincenzo Raimondi 1 - Definition of 'Settlement Risk'. A key source of risk is the possibility that

More information

Reducing foreign exchange settlement risk 1

Reducing foreign exchange settlement risk 1 Robert Lindley +41 61 280 8292 robert.lindley@bis.org Reducing foreign exchange settlement risk 1 Much progress has been made in reducing settlement risk in foreign exchange markets, particularly through

More information

Real Time Gross Settlement Systems: An Overview

Real Time Gross Settlement Systems: An Overview Real Time Gross Settlement Systems: An Overview RTGS Project Management Office State Bank of Pakistan The development of RTGS systems started as a response to the growing awareness of the need for sound

More information

Management of Foreign Exchange Settlement Risk at Canadian Banks

Management of Foreign Exchange Settlement Risk at Canadian Banks Financial System Review December 2007 Management of Foreign Exchange Settlement Risk at Canadian Banks Neville Arjani I n a standard foreign exchange transaction, parties to a trade agree to exchange value

More information

Settlement Monitoring

Settlement Monitoring Monitoring Information Paper I have a Matched trade in the View Reported Trades. How will the system settle this trade? The system creates a set of 2 s for every Matched trade with a settle status of Accepted.

More information

International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions

International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions This Annex supplements and should be read in conjunction with the General Disclosure Statement.

More information

1. HOW DOES FOREIGN EXCHANGE TRADING WORK?

1. HOW DOES FOREIGN EXCHANGE TRADING WORK? XV. Important additional information on forex transactions / risks associated with foreign exchange transactions (also in the context of forward exchange transactions) The following information is given

More information

Settlement risk in foreign exchange markets and CLS Bank 1

Settlement risk in foreign exchange markets and CLS Bank 1 Gabriele Galati +41 61 280 8923 gabriele.galati@bis.org Settlement risk in foreign exchange markets and CLS Bank 1 Introduction In September 2002, CLS Bank, a new financial institution set up to reduce

More information

CLS Third Party Evaluation Guide

CLS Third Party Evaluation Guide CLS Third Party Evaluation Guide August, 2013 An overview of the potential benefits that an institution should consider when evaluating indirect participation in the CLS settlement service. Contents 1.

More information

CLS Bank International

CLS Bank International CLS Bank International Best Practices for Nostro Agents and Nostro Clients June 2013 1.0 Background As a systemically important financial market utility designated by the Financial Stability Oversight

More information

Instruction IV.2-5 1/8

Instruction IV.2-5 1/8 N Title LCH.Clearnet SA Instruction IV.2-5 MARGINING OF TRANSACTIONS ON DEBT SECURITIES EXECUTED ON TRADING AND MATCHING PLATFORMS AND ON THE MTS ITALY MARKET (CALCULATION METHODOLOGY) CHAPITRE 1 SCOPE

More information

Basel Committee on Banking Supervision. Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions

Basel Committee on Banking Supervision. Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions Basel Committee on Banking Supervision Consultative document Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions Issued for comment by 12 October 2012

More information

Basic Strategies for Managing U.S. Dollar/Brazilian Real Exchange Rate Risk for Dollar-Denominated Investors. By Ira G. Kawaller Updated May 2003

Basic Strategies for Managing U.S. Dollar/Brazilian Real Exchange Rate Risk for Dollar-Denominated Investors. By Ira G. Kawaller Updated May 2003 Basic Strategies for Managing U.S. Dollar/Brazilian Real Exchange Rate Risk for Dollar-Denominated Investors By Ira G. Kawaller Updated May 2003 Brazilian Real futures and options on futures at Chicago

More information

Interlinkages between Payment and Securities. Settlement Systems

Interlinkages between Payment and Securities. Settlement Systems Interlinkages between Payment and Securities Settlement Systems David C. Mills, Jr. y Federal Reserve Board Samia Y. Husain Washington University in Saint Louis September 4, 2009 Abstract Payments systems

More information

RISK DISCLOSURE STATEMENT FOR FOREX TRADING AND IB MULTI- CURRENCY ACCOUNTS

RISK DISCLOSURE STATEMENT FOR FOREX TRADING AND IB MULTI- CURRENCY ACCOUNTS RISK DISCLOSURE STATEMENT FOR FOREX TRADING AND IB MULTI- CURRENCY ACCOUNTS Rules of the U.S. National Futures Association ("NFA") require Interactive Brokers ("IB") to provide you with the following Risk

More information

1. WHY WE NEED FOREIGN EXCHANGE 2. WHAT FOREIGN EXCHANGE MEANS 3. ROLE OF THE EXCHANGE RATE. 9 The Foreign Exchange Market in the United States

1. WHY WE NEED FOREIGN EXCHANGE 2. WHAT FOREIGN EXCHANGE MEANS 3. ROLE OF THE EXCHANGE RATE. 9 The Foreign Exchange Market in the United States CHAPTER 2 1. WHY WE NEED FOREIGN EXCHANGE Almost every nation has its own national currency or monetary unit its dollar, its peso, its rupee used for making and receiving payments within its own borders.

More information

Delivery options. Originally, delivery options refer to the options available to the seller of a bond

Delivery options. Originally, delivery options refer to the options available to the seller of a bond Delivery options Originally, delivery options refer to the options available to the seller of a bond futures contract, including the quality option, the timing option, and the wild card option. Delivery

More information

DARRELL DUFFIE GRADUATE SCHOOL OF BUSINESS, STANFORD UNIVERSITY

DARRELL DUFFIE GRADUATE SCHOOL OF BUSINESS, STANFORD UNIVERSITY ON THE CLEARING OF FOREIGN EXCHANGE DERIVATIVES DARRELL DUFFIE GRADUATE SCHOOL OF BUSINESS, STANFORD UNIVERSITY This note discusses the case for exempting foreign exchange derivatives from recent regulatory

More information

Recent developments in intraday liquidity in payment and settlement systems

Recent developments in intraday liquidity in payment and settlement systems Recent developments in intraday liquidity in payment and settlement systems FRÉDÉRIC HERVO Payment systems and Market Infrastructure Directorate Banque de France Alongside consolidation and globalisation

More information

Claiming a Fails Charge for a Settlement Fail in U.S. Treasury Securities

Claiming a Fails Charge for a Settlement Fail in U.S. Treasury Securities Claiming a Fails Charge for a Settlement Fail in U.S. Treasury Securities January 5, 2009 During the past several months, transactions in U.S. Treasury securities have exhibited widespread and chronic

More information

RISK MANAGEMENT IN NETTING SCHEMES FOR SETTLEMENT OF SECURITIES TRANSACTIONS

RISK MANAGEMENT IN NETTING SCHEMES FOR SETTLEMENT OF SECURITIES TRANSACTIONS RISK MANAGEMENT IN NETTING SCHEMES FOR SETTLEMENT OF SECURITIES TRANSACTIONS A background paper for the 4th OECD/World Bank Bond Market Workshop 7-8 March 02 by Jan Woltjer 1 1 Introduction Settlement

More information

Federal Reserve Policy on Payments System Risk

Federal Reserve Policy on Payments System Risk Federal Reserve Policy on Payments System Risk As amended effective January 11, 2007 INTRODUCTION RISKS IN PAYMENTS AND SETTLEMENT SYTEMS I. RISK MANAGEMENT IN PAYMENTS AND SETTLEMENT SYSTEMS A. Scope

More information

Astable and efficient financial system is a critical

Astable and efficient financial system is a critical Payment Networks: A Review of Recent Research James Chapman, Lana Embree, and Tom Roberts, Financial Stability Department; Nellie Zhang, Funds Management and Banking Network analysis offers a new approach

More information

Gridlock Resolution in Payment Systems

Gridlock Resolution in Payment Systems 67 Gridlock Resolution in Payment Systems Morten Linnemann Bech, Payment Systems, and Kimmo Soramäki, Bank of Finland. INTRODUCTION During the last few decades, most industrialised countries have introduced

More information

ISDA. International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions

ISDA. International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions ISDA International Swaps and Derivatives Association, Inc. Disclosure Annex for Foreign Exchange Transactions This Annex supplements and should be read in conjunction with the General Disclosure Statement.

More information

THE PAYMENT AND SETTLEMENT SYSTEMS 2007

THE PAYMENT AND SETTLEMENT SYSTEMS 2007 THE PAYMENT AND SETTLEMENT SYSTEMS 2007 1. INTRODUCTION The payment and settlement system was upgraded in 2007 with the introduction of a Real Time Gross Settlement (RTGS) system known in Israel as Zahav,

More information

Experts Workshop Payment Systems and Capacity Building in OIC Member Countries. Payment Systems in Malaysia. Istanbul 26 Sept 2010

Experts Workshop Payment Systems and Capacity Building in OIC Member Countries. Payment Systems in Malaysia. Istanbul 26 Sept 2010 Experts Workshop Payment Systems and Capacity Building in OIC Member Countries Payment Systems in Malaysia Istanbul 26 Sept 2010 1 Payment and settlement systems in Malaysia Commercial Banks, Islamic Banks,

More information

RISK DISCLOSURE STATEMENT

RISK DISCLOSURE STATEMENT RISK DISCLOSURE STATEMENT 1. Purpose The purpose of this Statement is to provide to the Client appropriate guidance on the nature and risks of the specific type of financial instrument that are offered

More information

FX market trends before, between and beyond Triennial Surveys 1

FX market trends before, between and beyond Triennial Surveys 1 Morten Bech morten.bech@bis.org Jhuvesh Sobrun jhuvesh.sobrun@bis.org FX market trends before, between and beyond Triennial Surveys 1 This special feature looks at trading activity in the foreign exchange

More information

IOSCO BN01-11 Consultative Report

IOSCO BN01-11 Consultative Report IOSCO BN01-11 10 March 2011 Cover note to the consultative report 1 Overview of the report The consultative report on Principles for Financial Market Infrastructures (consultative report) was prepared

More information

Consultation Paper: Integration of Forex Forward & Forex Settlement Segment

Consultation Paper: Integration of Forex Forward & Forex Settlement Segment July 24, 2015 THE CLEARING CORPORATION OF INDIA LTD. Risk Management Department Consultation Paper: Integration of Forex Forward & Forex Settlement Segment 1. Introduction: 1.1 The Clearing Corporation

More information

A practical guide to FX Arbitrage

A practical guide to FX Arbitrage A practical guide to FX Arbitrage FX Arbitrage is a highly debated topic in the FX community with many unknowns, as successful arbitrageurs may not be incentivized to disclose their methodology until after

More information

Pakistan Real Time Interbank Settlement Mechanism: An Overview

Pakistan Real Time Interbank Settlement Mechanism: An Overview Pakistan Real Time Interbank Settlement Mechanism: An Overview RTGS Project Management Office State Bank of Pakistan The development of PRISM (Pakistan Real time Interbank Settlement Mechanism) system

More information

Impact of Treasury s OTC Derivatives Legislation on the Foreign Exchange Market. Corporations participate in the foreign exchange market to:

Impact of Treasury s OTC Derivatives Legislation on the Foreign Exchange Market. Corporations participate in the foreign exchange market to: ISDA International Swaps and Derivatives Association, Inc. 360 Madison Avenue, 16th Floor New York, NY 10017 United States of America Telephone: 1 (212) 901-6000 Facsimile: 1 (212) 901-6001 email: isda@isda.org

More information

Introduction to Fixed Income (IFI) Course Syllabus

Introduction to Fixed Income (IFI) Course Syllabus Introduction to Fixed Income (IFI) Course Syllabus 1. Fixed income markets 1.1 Understand the function of fixed income markets 1.2 Know the main fixed income market products: Loans Bonds Money market instruments

More information

Assessment of Monte Titoli s observance of the ESCB-CESR Recommendations for Securities Settlement Systems

Assessment of Monte Titoli s observance of the ESCB-CESR Recommendations for Securities Settlement Systems Assessment of Monte Titoli s observance of the ESCB-CESR Recommendations for Securities Settlement Systems Premise Monte Titoli is Italy s central securities depository (CSD). It manages the securities

More information

Assignment 10 (Chapter 11)

Assignment 10 (Chapter 11) Assignment 10 (Chapter 11) 1. Which of the following tends to cause the U.S. dollar to appreciate in value? a) An increase in U.S. prices above foreign prices b) Rapid economic growth in foreign countries

More information

FOREIGN EXCHANGE SETTLEMENT RISK

FOREIGN EXCHANGE SETTLEMENT RISK THE PAYMENTS RISK COMMITTEE FOREIGN EXCHANGE SETTLEMENT RISK Report by the FX Settlement Risk Task Force New York February 2005 The Payments Risk Committee is a private sector group comprising senior managers

More information

VISION OF THE FUTURE NATIONAL PAYMENT SYSTEMS

VISION OF THE FUTURE NATIONAL PAYMENT SYSTEMS BANK OF JAMAICA (BOJ) VISION OF THE FUTURE NATIONAL PAYMENT SYSTEMS EXECUTIVE SUMMARY MARCH 2006 EXECUTIVE SUMMARY 1. The Bank of Jamaica (BOJ) has embarked on a process of payment system reform to enhance

More information

Enhancing the resilience of the Bank of England s Real-Time Gross Settlement infrastructure

Enhancing the resilience of the Bank of England s Real-Time Gross Settlement infrastructure 316 Quarterly Bulletin 2014 Q3 Enhancing the resilience of the Bank of England s Real-Time Gross Settlement infrastructure By Ed Kelsey and Simon Rickenbach of the Bank s Market Services Division. (1)

More information

Continuous Linked Settlement An Empirical Approach

Continuous Linked Settlement An Empirical Approach Continuous Linked Settlement An Empirical Approach Alexandra Schaller 1 University of Zurich March, 2008 1 Please send all correspondence to: Swiss Banking Institute, University of Zürich, Plattenstrasse

More information

NEW TO FOREX? FOREIGN EXCHANGE RATE SYSTEMS There are basically two types of exchange rate systems:

NEW TO FOREX? FOREIGN EXCHANGE RATE SYSTEMS There are basically two types of exchange rate systems: NEW TO FOREX? WHAT IS FOREIGN EXCHANGE Foreign Exchange (FX or Forex) is one of the largest and most liquid financial markets in the world. According to the authoritative Triennial Central Bank Survey

More information

Futures Contract Introduction

Futures Contract Introduction Futures Contract Introduction 1 The first futures exchange market was the Dojima Rice exchange in Japan in the 1730s, to meet the needs of samurai who being paid in rice and after a series of bad harvests

More information

Beliefs and Settlement Risk

Beliefs and Settlement Risk Beliefs and Settlement Risk James McAndrews Federal Reserve Bank of New York Kimmo Soramäki Helsinki University of Technology For presentation at the Fifth Annual Bank of Finland Simulation Seminar The

More information

Intraday Liquidity Flows

Intraday Liquidity Flows Intraday Liquidity Flows Report of the Payments Risk Committee March 30, 2012 Sponsored by the Federal Reserve Bank of New York, the Payments Risk Committee is a private sector group that includes senior

More information

Agathe Côté: Toward a stronger financial market infrastructure for Canada taking stock

Agathe Côté: Toward a stronger financial market infrastructure for Canada taking stock Agathe Côté: Toward a stronger financial market infrastructure for Canada taking stock Remarks by Ms Agathe Côté, Deputy Governor of the Bank of Canada, to the Association for Financial Professionals of

More information

CLS Bank International 39 Broadway 29th Floor New York NY 10006

CLS Bank International 39 Broadway 29th Floor New York NY 10006 Alan Bozian President and Chief Executive Officer CLS Bank International 39 Broadway 29th Floor New York NY 10006 Tel: +1 212 943 2293 Fax: +1 212 363 6998 abozian@cls-bank.com United States Department

More information

Settlement Risk in Foreign Exchange Transactions

Settlement Risk in Foreign Exchange Transactions Advisory Category: Capital Subject: Settlement Risk in Foreign Exchange Transactions Date: June 2013 Introduction This Advisory establishes OSFI s expectations regarding the management of foreign exchange

More information

n Economic Commentaries

n Economic Commentaries n Economic Commentaries The OTC derivatives market fulfils an important function in the financial system. Consequently, risk management must be good and transparency high in this market. An EU regulation

More information

ISDA 2012 Disclosure Annex for Foreign Exchange Transactions

ISDA 2012 Disclosure Annex for Foreign Exchange Transactions ISDA 2012 Disclosure Annex for Foreign Exchange Transactions We refer to Transactions in which the Underliers are foreign currency exchange rates, or under which a party is obligated to deliver a different

More information

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION This statement sets out the risks in trading certain products between Newedge Group ( NEWEDGE ) and the client (the Client ). The Client should note that other risks will apply when trading in emerging

More information

LAST TRADING DAYS (Except Canadian Dollars) - December 17, 2007, March 17, 2008, June 16, 2008, September 15, 2008 and December 15, 2008

LAST TRADING DAYS (Except Canadian Dollars) - December 17, 2007, March 17, 2008, June 16, 2008, September 15, 2008 and December 15, 2008 DELIVERY PROCEDURES FOR FOREIGN CURRENCIES AND CROSS-RATE FUTURES CONTRACTS AND CME$INDEX LAST TRADING DAYS (Except Canadian Dollars) - December 17, 2007, March 17, 2008, June 16, 2008, September 15, 2008

More information

Frequent Asked Questions

Frequent Asked Questions Frequent Asked Questions 1. What are RMB currency futures? What will be the underlying currency pair? RMB currency futures are futures contracts based on the exchange rates between RMB and other currencies.

More information

PAYMENT AND SETTLEMENT SYSTEMS IN SPAIN

PAYMENT AND SETTLEMENT SYSTEMS IN SPAIN Francisco Linares Payment Settlement Systems Unit Manager Jesús Pérez Bonilla Securities Settlement Systems Unit Manager Payments Week 2005 Madrid 20 June 2005 PAYMENT SYSTEMS DEPARTMENT AGENDA PAYMENT

More information

CHAPS Technical Requirements

CHAPS Technical Requirements CHAPS Technical Requirements 1. Technical Overview CHAPS provides a payment system between its Members settling in real time across sterling settlement accounts at the Bank of England. The key components

More information

Client Acknowledgement. Risk Warning Notice for CFDs

Client Acknowledgement. Risk Warning Notice for CFDs Please read this document fully. IMPORTANT NOTICE Client Acknowledgement Clients (including account applicants) of CMC Markets Singapore Pte. Ltd. ( CMC Markets ) should be aware of the risks involved

More information

2013 Self-assessment of the Reserve Bank Information and Transfer System

2013 Self-assessment of the Reserve Bank Information and Transfer System 2013 Self-assessment of the Reserve Bank Information and Transfer System December 2013 Contents 1. Introduction and Executive Summary 1 2. General Background 4 3. Summary of Ratings and Actions 15 4. Self-assessment

More information

FOREIGN EXCHANGE RISK MANAGEMENT

FOREIGN EXCHANGE RISK MANAGEMENT CHAPTER - VII CHAPTER - VII FOREIGN EXCHANGE RISK MANAGEMENT INTRODUCTION DEFINITION & MEANING EXPOSURE IN FOREIGN EXCHANGE > TRANSACTION EXPOSURES > TRANSLATION EXPOSURES > OPERATING EXPOSURES MANAGING

More information

FOREIGN EXCHANGE SETTLEMENT RISK PRACTICES IN SINGAPORE

FOREIGN EXCHANGE SETTLEMENT RISK PRACTICES IN SINGAPORE FOREIGN EXCHANGE SETTLEMENT RISK PRACTICES IN SINGAPORE July 2001 Market Infrastructure and Risk Advisory Department Monetary Authority of Singapore FOREIGN EXCHANGE SETTLEMENT RISK PRACTICES IN SINGAPORE

More information

KEY INFORMATION DOCUMENT

KEY INFORMATION DOCUMENT KEY INFORMATION DOCUMENT PSG WEALTH CURRENCY FUTURES TRADING ACCOUNT TRADING ACCOUNT PAGE 0 This document is a summary of key information about the PSG Wealth currency futures trading account. It will

More information

MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS

MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS CLIENT SERVICE AGREEMENT Halifax New Zealand Limited Client Service Agreement Product Disclosure Statement for MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS Halifax New Zealand Limited Financial

More information

Single Stock Futures ( SSF ) Simple and constant gearing

Single Stock Futures ( SSF ) Simple and constant gearing Single Stock Futures ( SSF ) Simple and constant gearing 1 Content Situation 3 Simple geared share trading simple constant gearing single stock futures Solution 4 What are single stock futures? 5 Gearing

More information

Terms and Conditions

Terms and Conditions Terms and Conditions 1. TABLE OF CONTENTS 1. TABLE OF CONTENTS 2. SERVICES OFFERED TO THE CUSTOMER 3. EXECUTION-ONLY ARRANGEMENTS 4. YOUR INVESTMENT OBJECTIVES 5. RESTRICTIONS ON TYPES OF INVESTMENT 6.

More information

CLS AND BILATERAL NETTING BETWEEN A ROCK AND A HARD PLACE. A White Paper by Wall Street Systems

CLS AND BILATERAL NETTING BETWEEN A ROCK AND A HARD PLACE. A White Paper by Wall Street Systems CLS AND BILATERAL NETTING BETWEEN A ROCK AND A HARD PLACE A White Paper by Wall Street Systems CLS And BiLAterAL netting BetWeen A rock And A HArd PLACe Content Introduction 3 FX Settlement Risk 4 The

More information

The Role of Exchange Settlement Accounts

The Role of Exchange Settlement Accounts Reserve Bank of Australia Bulletin March 1999 The Role of Exchange Settlement Accounts Introduction Exchange Settlement (ES) Accounts provided by the Reserve Bank play an important role in the Australian

More information

1 Introduction. 1.5 Margin and Variable Margin Feature

1 Introduction. 1.5 Margin and Variable Margin Feature Risk Disclosure Spread Betting and CFDs are high risk investments. Your capital is at risk. Spread Betting and CFDs are not suitable for all investors and you should ensure that you understand the risks

More information

Settlement of foreign exchange transactions

Settlement of foreign exchange transactions Hallgrímur Ásgeirsson 1 Settlement of foreign exchange transactions 1. Introduction Foreign exchange transactions involve a wide range of risks for credit institutions that are active in the foreign exchange

More information

Financial Stability Standards for Securities Settlement Facilities

Financial Stability Standards for Securities Settlement Facilities Attachment 4 Financial Stability Standards for Securities Settlement Facilities Introduction The Financial Stability Standards for Securities Settlement Facilities (SSF Standards) are determined under

More information

Network theory and systemic importance

Network theory and systemic importance Network theory and systemic importance Kimmo Soramaki European Central Bank IMF Conference on Operationalizing Systemic Risk Measurement 28 May, Washington DC The views expressed in this presentation do

More information

The Introduction of Same-day Settlement of Direct Entry Obligations in Australia

The Introduction of Same-day Settlement of Direct Entry Obligations in Australia The Introduction of Same-day Settlement of Direct Entry Obligations in Australia Sascha Fraser and Adriarne Gatty* In November 213, the Reserve Bank introduced changes to its Reserve Bank Information and

More information

6. Federal Funds: Final Settlement

6. Federal Funds: Final Settlement 6. Federal Funds: Final Settlement Stigum (p. 507) says The primary job of the manager of a bank s fed funds desk is to ensure (1) that the bank settles with the Fed and (2) that in doing so, it hold no

More information

TARGET2-Securities maximises settlement efficiency in the European securities market. Department Payments and Settlement Systems

TARGET2-Securities maximises settlement efficiency in the European securities market. Department Payments and Settlement Systems maximises settlement efficiency in the European securities market Department Payments and Settlement Systems Martin Barraud George Doyle Page 2 Definition and classification of TARGET2-Securities TARGET2-Securities

More information

Key Points. Ref.:EBF_007865E. Brussels, 09 May 2014

Key Points. Ref.:EBF_007865E. Brussels, 09 May 2014 Ref.:EBF_007865E Brussels, 09 May 2014 Launched in 1960, the European Banking Federation is the voice of the European banking sector from the European Union and European Free Trade Association countries.

More information

INTRODUCTION. To this end, this presentation will deal with some AMEDA members experiences concerning settlement models

INTRODUCTION. To this end, this presentation will deal with some AMEDA members experiences concerning settlement models SETTLEMENT MODELS Presented by Mrs Boutheina NASRA Developed by STICODEVAM INTRODUCTION At the 15th AMEDA meeting It was agreed by members to create a technical committee piloted by Tunisian depository

More information

CURRENCY FUTURES IN INDIA WITH SPECIAL REFERENCE TO CURRENCY FUTURES TRADED AT NSE

CURRENCY FUTURES IN INDIA WITH SPECIAL REFERENCE TO CURRENCY FUTURES TRADED AT NSE CURRENCY FUTURES IN INDIA WITH SPECIAL REFERENCE TO CURRENCY FUTURES TRADED AT NSE Vinayak R. Gramopadhye Assistant professor, ASM s Institute of International Business and Research, Pimpri, Pune-18 Abstract

More information

RISK DISCLOSURE STATEMENT

RISK DISCLOSURE STATEMENT RISK DISCLOSURE STATEMENT In consideration of UBFS invest powered by Moneychoice Brokers Ltd (hereafter the Company ) agreeing to enter into over-the-counter ( OTC ) contracts for differences ( CFDs )

More information

CHAPTER 8 SUGGESTED ANSWERS TO CHAPTER 8 QUESTIONS

CHAPTER 8 SUGGESTED ANSWERS TO CHAPTER 8 QUESTIONS INSTRUCTOR S MANUAL: MULTINATIONAL FINANCIAL MANAGEMENT, 9 TH ED. CHAPTER 8 SUGGESTED ANSWERS TO CHAPTER 8 QUESTIONS. On April, the spot price of the British pound was $.86 and the price of the June futures

More information

Optimizing settlement risk management: A White Paper by Wall Street Systems

Optimizing settlement risk management: A White Paper by Wall Street Systems Optimizing settlement risk management: CLS and beyond A White Paper by Wall Street Systems CONTENTS Introduction 3 CLS: solving the settlement risk conundrum 4 The history of FX settlement risk 5 The Herstatt

More information

INTRODUCTION. This program should serve as just one element of your due diligence.

INTRODUCTION. This program should serve as just one element of your due diligence. FOREX ONLINE LEARNING PROGRAM INTRODUCTION Welcome to our Forex Online Learning Program. We ve always believed that one of the best ways to protect investors is to provide them with the materials they

More information

Bank of Israel Payment and Settlement Systems. Israel's Payment and Settlement Systems

Bank of Israel Payment and Settlement Systems. Israel's Payment and Settlement Systems Bank of Israel Payment and Settlement Systems Israel's Payment and Settlement Systems Red Book 2012 Bank of Israel Passages may be cited provided source is specified Catalogue # 601760 Typesetting by Publications

More information

Real-time Gross Settlement in Australia

Real-time Gross Settlement in Australia Real-time Gross Settlement in Australia Peter Gallagher, Jon Gauntlett and David Sunner* The introduction of real-time gross settlement (RTGS) in Australia in 1998 was a major reform to reduce risk in

More information

THE JESUIT UNIVERSITY OF NEW YORK GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

THE JESUIT UNIVERSITY OF NEW YORK GRADUATE SCHOOL OF BUSINESS ADMINISTRATION FORDHAM UNIVERSITY THE JESUIT UNIVERSITY OF NEW YORK GRADUATE SCHOOL OF BUSINESS ADMINISTRATION 7 April 2014 Via e-mail to fsb@bis.org Secretariat of the Financial Stability Board c/o Bank for International

More information

Guidance regarding the Commission s rules relating to Trading Books:

Guidance regarding the Commission s rules relating to Trading Books: Guidance regarding the Commission s rules relating to Trading Books: Including the Commission s prudential reporting requirements for Jersey incorporated deposit takers that have a trading book Issued

More information

Convention Seychelles Interbank Foreign Exchange Market (SIFXM)

Convention Seychelles Interbank Foreign Exchange Market (SIFXM) Convention Seychelles Interbank Foreign Exchange Market (SIFXM) A. The Market The Central Bank of Seychelles (CBS) is developing an interbank market for the trading of foreign exchange as part of its ongoing

More information

INTRODUCTION TO FOREIGN EXCHANGE

INTRODUCTION TO FOREIGN EXCHANGE INTRODUCTION TO FOREIGN EXCHANGE Capademy Tutorial Series Option Banque Training Series Vol. 1 The foreign exchange market known as forex for short is the market in which currencies or sovereign money

More information

Chapter 5. The Foreign Exchange Market. Foreign Exchange Markets: Learning Objectives. Foreign Exchange Markets. Foreign Exchange Markets

Chapter 5. The Foreign Exchange Market. Foreign Exchange Markets: Learning Objectives. Foreign Exchange Markets. Foreign Exchange Markets Chapter 5 The Foreign Exchange Market Foreign Exchange Markets: Learning Objectives Examine the functions performed by the foreign exchange (FOREX) market, its participants, size, geographic and currency

More information

Berne, 14 June 2007. Introductory remarks by Thomas Jordan

Berne, 14 June 2007. Introductory remarks by Thomas Jordan abcdefg News conference Berne, 14 June 2007 Introductory remarks by Thomas Jordan In my remarks, I would like to address three topics. First, I will speak about the adjustments in the composition of our

More information

Oversight of payment and settlement systems

Oversight of payment and settlement systems Oversight of payment and settlement systems The efficiency of the financial system depends on the smooth functioning of various payment and settlement systems, because all financial transactions are performed

More information

is held and maintained at GAIN Capital who serves as the clearing agent and counterparty to your trades. GAIN Capital is a

is held and maintained at GAIN Capital who serves as the clearing agent and counterparty to your trades. GAIN Capital is a Last updated July 2, 2015 FOREX RISK DISCLOSURE STATEMENT Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Before deciding to trade

More information

SUMMARY PROSPECTUS SDIT Short-Duration Government Fund (TCSGX) Class A

SUMMARY PROSPECTUS SDIT Short-Duration Government Fund (TCSGX) Class A May 31, 2016 SUMMARY PROSPECTUS SDIT Short-Duration Government Fund (TCSGX) Class A Before you invest, you may want to review the Fund s Prospectus, which contains information about the Fund and its risks.

More information

MODULE 5. Guidance to completing the Settlement Risk module of BSL/2

MODULE 5. Guidance to completing the Settlement Risk module of BSL/2 MODULE 5 Guidance to completing the Settlement Risk module of BSL/2 Settlement risk Introduction Under Basel II banks should develop, implement and improve systems for tracking and monitoring credit risk

More information

OTC Derivatives: Benefits to U.S. Companies

OTC Derivatives: Benefits to U.S. Companies OTC Derivatives: Benefits to U.S. Companies International Swaps and Derivatives Association May 2009 1 What are derivatives? Derivatives are financial instruments that: Transfer risk from one party to

More information

White Paper. Intraday liquidity reporting - The case for a pragmatic industry solution

White Paper. Intraday liquidity reporting - The case for a pragmatic industry solution White Paper Intraday liquidity reporting - The case for a pragmatic industry solution Contents Executive Summary 3 1. The importance of intraday liquidity monitoring 4 2. BCBS intraday liquidity monitoring

More information

The Reserve Bank s Open Market Operations

The Reserve Bank s Open Market Operations June 2 The Reserve Bank s Open Market Operations Introduction The Cash Rate The stance of monetary policy in Australia is expressed in terms of a target for the cash rate the interest rate on unsecured

More information

EUROSYSTEM ASSESSMENT REPORT ON THE IMPLEMENTATION OF THE BUSINESS CONTINUITY OVERSIGHT EXPECTATIONS FOR SYSTEMICALLY IMPORTANT PAYMENT SYSTEMS

EUROSYSTEM ASSESSMENT REPORT ON THE IMPLEMENTATION OF THE BUSINESS CONTINUITY OVERSIGHT EXPECTATIONS FOR SYSTEMICALLY IMPORTANT PAYMENT SYSTEMS EUROSYSTEM ASSESSMENT REPORT ON THE IMPLEMENTATION OF THE BUSINESS CONTINUITY OVERSIGHT EXPECTATIONS FOR SYSTEMICALLY IMPORTANT PAYMENT SYSTEMS INTRODUCTION Payment systems are part of the basic infrastructure

More information

Product Disclosure Statement

Product Disclosure Statement Product Disclosure Statement Sumo Forex Limited Level 4, 228 Queen Street, Auckland, 1010, New Zealand Tel: +6498871044 Email: support@sumoforex.com 1. Important Information and Disclaimer 1.1 Financial

More information