<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The dynamics of the increase in volume and amount of the financial or commercial transactions during the last decennials has amplified the role of clearing and settlement systems, along with the payment ones. From the quality of these systems as a financial markets stability provider also derives the concern for the management of financial risks mainly generated by the participants in these systems. The clearing-settlement systems, operated by infrastructure entities of the capital markets, ensure, within certain limits, a risk management for the incidents that could occur in the settlement activity regarding the financial transactions concluded between participants. We are going to present a methodology for determining the required collateral that must be maintained/updated by the debtor participants of a clearing-settlement system in order to ensure a robust management of the risks that could occur in the settlement operations. This methodology can be applied by any infrastructure entity of the capital market that manages collateral systems to limit the number of cases of settlement fails in financial transactions.</p>
</abstract>

The dynamics of the increase in volume and amount of the financial or commercial transactions during the last decennials has amplified the role of clearing and settlement systems, along with the payment ones. From the quality of these systems as a financial markets stability provider also derives the concern for the management of financial risks mainly generated by the participants in these systems. The clearing-settlement systems, operated by infrastructure entities of the capital markets, ensure, within certain limits, a risk management for the incidents that could occur in the settlement activity regarding the financial transactions concluded between participants. We are going to present a methodology for determining the required collateral that must be maintained/updated by the debtor participants of a clearing-settlement system in order to ensure a robust management of the risks that could occur in the settlement operations. This methodology can be applied by any infrastructure entity of the capital market that manages collateral systems to limit the number of cases of settlement fails in financial transactions.

Determination by the Settlement Systems of the Required Collateral Imposed to Participants

Proceedings of the International Conference on Business Excellence

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The dynamics of the increase in volume and amount of the financial or commercial transactions during the last decennials has amplified the role of clearing and...

Determination by the Settlement Systems of the Required Collateral Imposed to Participants

Published Online: Jul 27, 2020

Page range: 925 - 939

DOI: https://doi.org/10.2478/picbe-2020-0088

Keywords
Collateral System, Settlement Operations, Securities Settlement System, Participants

© 2020 Laurentiu Paul Baranga et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Determination by the Settlement Systems of the Required Collateral Imposed to Participants

Published Online: Jul 27, 2020

Page range: 925 - 939

DOI: https://doi.org/10.2478/picbe-2020-0088

KeywordsCollateral System, Settlement Operations, Securities Settlement System, Participants

© 2020 Laurentiu Paul Baranga et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Collateral System, Settlement Operations, Securities Settlement System, Participants