BIS reports on settlement risk
In a consultative report, BIS says: “The central bank strategy to reduce systemic risk arising from settling foreign exchange trades has achieved significant success. However, a market-wide survey has identified areas where individual institutions, industry groups and central banks need to take further action to reduce and control remaining large and long-lasting exposures and to guard against a risk of reversing progress already made.”
Risk reduction
BIS says that the major reduction in risk very much reflects the impact CLS has had since its creation.
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