Risk Forum: Settlement Risk

dollar vortex

View Risk Forum: Settlement Risk

Moderated by Nick Sawyer, editor, Risk magazine

Panelists:

  • Rachael Hoey, Director, Business Development at CLS
  • Andy Coyne, Managing Director, Head of FX Prime and G10 eCommerce, Citi
  • Martin Wiedmann, Head of Global Foreign Exchange Sales and Distribution, Credit Suisse
  • Peter Connor, COO Global Foreign Exchange, Deutsche Bank
  • Joe Norena, MD, Global COO - Foreign Exchange and Metals, Global Markets, HSBC

Forum Questions:

1. Is settlement risk less of an issue for the market now?

2. Rachael, have you seen a significant increase in firms signing up to the CLS?

3. Historically, the process of getting third parties on board has been slow. Is there anything the industry and CLS can do to speed up the process?

4. Do you see the market moving towards a two-tier pricing system?

5. You've mentioned the effort to get more second-tier banks on board. Is there also an active programme for increasing end-user membership?

6. Peter, what is the approach at Deutsche Bank?

7. Martin, is that a similar experience you've had at Credit Suisse - there's a huge pipeline for third-party sign-ups?

8. An obvious next step will to be to include more currencies in the CLS system. How was the experience post-Lehman of those currencies within CLS and those outside of the system, as well as some of the difficulties surrounding the emerging market currencies during that period?

9. Rachel, could you give an overview of where things currently stand in terms of widening the universe of currencies?

10. Would the drive to add new currencies and members be helped by a greater regulatory push?

11. There has been a lot of discussion on central clearing, including of forex contracts. Would the market be better served by less focus on central clearing and more on settlement risk?

12. Is there anything banks can do internally to eliminate settlement risk that goes between client accounts or between different subsidiaries within their own institution? The FX JSC report makes reference to aggregation services and netting. What is the status of other initiatives the industry is working on?

13. In summing up, is it fair to say the industry is pleased with the way the market performed during the post-Lehman fallout last year but recognises more work needs to be done?

 

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