Reducing Risk in Foreign Exchange Settlements

“.. despite significant progress, the potential consequences of a disruption in the foreign exchange settlement process remain considerable”

BIS Steering Group on Settlement Risk in Foreign Exchange Transactions – 2007

In a recent progress report form the BIS, its Steering Group on Settlement Risk in Foreign Exchange Transactions, concludes that while encouraging progress has been made, specifically with the creation of the Continuous Linked Settlement (CLS) process, much more needs to be done. While many individual banks and groups of financial institutions have greatly improved the way they manage their foreign exchange settlement exposures, many banks still do not manage their exposures appropriately and industry efforts have not yet realized their full risk-reducing potential.

It is just over a decade since central banks launched a major campaign to reduce foreign exchange settlement risk. That strategy was based on the belief that the private sector, in active cooperation with the public sector, had the power to control the foreign exchange settlement risk that first came into sharp focus at the time of the failure of Bankhaus Herstatt in 1974

While much progress has been made over the past ten years, much still remains to be done.

This 2-day intensive course takes you directly into the world of Foreign Exchange Risk. Participants will gain a deeper insight into Foreign Exchange Settlement Risk, what it is and what is needed to control it.

Join us to explore the nature of foreign exchange settlement risk, what has been done and what remains to be done to mitigate it. Learn how to calculate the extent and duration of your settlement exposures.

Different types of settlement mechanisms are examined in detail including how banks, worldwide, handle these processes today. Because of its significance the CLS rational, processes and practicalities are examined in detail.

This is a practical “hands on” course that will provide participants with the tools and understanding to better mitigate Foreign Exchange Settlement Risk.

What does the program cover

An introduction into Foreign Exchange

Currency principles
Definitions
What is Foreign Exchange and how does it work?
What are the Risks?

Managing the Risks

The 1996 Strategy
Developments since 1996

The Present Situation

2006 Survey
The Math
Who uses which methods

Settlement Methods

Traditional Correspondent Banking
Bilateral Netting
Continuous Linked Settlement
Features
How it Works
On-Us methods
Other PVP systems
Factors influencing the choice of settlement method

Present Day Actions

Central Banks
Control of Exposures

The Future

What still needs to be done
Recommended Further Action

Who should attend?

The course has been specifically designed for Senior Bankers involved with

Foreign Exchange
International & Correspondent Banking
Payment Systems and Money Transfers
Risk Managers
Auditing & Compliance
Payment Strategy
Retail Banking Services
Banking Product Development

Money Transfer Operators

Foreign Exchange Dealers

Risk Professionals

Internal Auditors

This course is for beginners and seasoned forex practitioners alike.

For specific information contact us at courses@citadeladvantage.com



CITADEL ADVANTAGE		COURSE - FX Settlement Risk

	Reducing Risk in Foreign Exchange Settlements “.. despite significant progress, the potential consequences of a disruption in the foreign exchange settlement process remain considerable” BIS Steering Group on Settlement Risk in Foreign Exchange Transactions – 2007 In a recent progress report form the BIS, its Steering Group on Settlement Risk in Foreign Exchange Transactions, concludes that while encouraging progress has been made, specifically with the creation of the Continuous Linked Settlement (CLS) process, much more needs to be done. While many individual banks and groups of financial institutions have greatly improved the way they manage their foreign exchange settlement exposures, many banks still do not manage their exposures appropriately and industry efforts have not yet realized their full risk-reducing potential. It is just over a decade since central banks launched a major campaign to reduce foreign exchange settlement risk. That strategy was based on the belief that the private sector, in active cooperation with the public sector, had the power to control the foreign exchange settlement risk that first came into sharp focus at the time of the failure of Bankhaus Herstatt in 1974 While much progress has been made over the past ten years, much still remains to be done. This 2-day intensive course takes you directly into the world of Foreign Exchange Risk. Participants will gain a deeper insight into Foreign Exchange Settlement Risk, what it is and what is needed to control it. Join us to explore the nature of foreign exchange settlement risk, what has been done and what remains to be done to mitigate it. Learn how to calculate the extent and duration of your settlement exposures. Different types of settlement mechanisms are examined in detail including how banks, worldwide, handle these processes today. Because of its significance the CLS rational, processes and practicalities are examined in detail. This is a practical “hands on” course that will provide participants with the tools and understanding to better mitigate Foreign Exchange Settlement Risk. What does the program cover An introduction into Foreign Exchange Currency principles Definitions What is Foreign Exchange and how does it work? What are the Risks? Managing the Risks The 1996 Strategy Developments since 1996 The Present Situation 2006 Survey The Math Who uses which methods Settlement Methods Traditional Correspondent Banking Bilateral Netting Continuous Linked Settlement Features How it Works On-Us methods Other PVP systems Factors influencing the choice of settlement method Present Day Actions Central Banks Control of Exposures The Future What still needs to be done Recommended Further Action Who should attend? The course has been specifically designed for Senior Bankers involved with Foreign Exchange International & Correspondent Banking Payment Systems and Money Transfers Risk Managers Auditing & Compliance Payment Strategy Retail Banking Services Banking Product Development Money Transfer Operators Foreign Exchange Dealers Risk Professionals Internal Auditors *This course is for beginners and seasoned forex practitioners alike.* For specific information contact us at courses@citadeladvantage.com