Clearing and Settling Financial Transactions, Circa 2000

  • Edward J. Green
Chapter

Abstract

In order for a market to exist, there must be a mechanism to convey whatever is traded conveniently and safely between parties to the trades. Moreover, the scope of the market can only be as large as the community of traders who have access to such means of transfer. In particular, in a large market, traders who do not know one another must deliver assets and money in order to complete their trades. Each trader will only be willing to do so if he is confident that the reciprocal payment or asset transfer due to him will also be made. Such trust in the integrity of the market must be supported by formal, institutionalised safeguards.

Keywords

Central Bank Federal Reserve Settlement System Original Contract Commodity Future Trading Commission 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. American Law Institute and National Conference of Commissioners of Uniform State Laws (1994), Uniform Commercial Code Article 8—Investment Securities (Revised), http://www2.1aw.cornell.edu/cgi-bin/foliocgi.exe/ucc8.
  2. Baer, H.L., V.G. France, and J.T. Moser (1996), Opportunity Cost and Prudentiality: An Analysis of Futures Clearinghouse Behavior, University of Illinois, http://w3.aces.uiuc.edu/ACE/ofor/wp0196/wp96–01.htm.
  3. Committee on Payment and Settlement Systems (1992), Delivery Versus Payment in Securities Settlement Systems, http://www.bis.org/publ/index.htm.
  4. Committee on Payment and Settlement Systems (1995), Cross-Border Securities Settlements, http://www.bis.org/publ/index.htm.
  5. Committee on Payment and Settlement Systems (1997a), Clearing Arrangements for Exchange-Traded Derivatives, http://www.bis.org/publ/index.htm.
  6. Committee on Payment and Settlement Systems (1997b), Real-Time Gross Settlement Systems, http://www.bis.org/publ/index.htm.
  7. Committee on Payment and Settlement Systems and the Euro-currency Standing Committee (1998), OTC Derivatives: Settlement Procedures and Counterparty Risk Management, http://www.bis.org/publ/index.htm.
  8. Committee on Payment and Settlement Systems (2000), Core Principles for Systemically Important Payment Systems, http://www.bis.org/publ/index.htm.
  9. Commodity Futures Trading Commission (2000), 17 CFR Part 35 Exemption for Bilateral Transactions, Federal Register 65 FR 39033.Google Scholar
  10. Depository Trust Company (1997), Response to the Disclosure Framework for Securities Settlement Systems, http://www.bis.org/publ/index.htm.
  11. Fujiki, H., E.J. Green and A. Yamazaki (1999), Sharing the Risk of Settlement Failure, Federal Reserve Bank of Minneapolis, http://www.minneapolisfed.org/research/wp/wp594.html.
  12. Kahn, C.M., J. McAndrews and W. Roberds (1999), Settlement Risk Under Gross and Net Settlement, Federal Reserve Bank of New York, http://www.ny.frb.org/rmaghome/staffrp/sr86.html.
  13. President’s Working Group on Financial Markets (1999), Over-the-Counter Derivatives Markets and the Commodity Exchange Act, http://www.treas.gov/press/releases/docs/otcact.pdf.
  14. Rutstein, C., C.D. Howe, C. Voce, S. Kim, and M. Cussen (1999), Managing eMarketplace Risks, The Forrester Report (December).Google Scholar
  15. Securities Industry Association (2000), T+1 Business Case Final Report, http://www.sia.com/tplus_one_issue/pdf/BusinessCaseFinal.pdf.
  16. Yamazaki, A. (1996), Foreign Exchange Netting and Systematic Risk, Mimeo, Hitotusbashi University.Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Edward J. Green
    • 1
  1. 1.Federal Reserve Bank of ChicagoUSA

Personalised recommendations