The concept known as FX settlement risk (aka Herstatt risk) came into focus some thirty years ago when Bankhaus Herstatt, a small German bank, became insolvent leaving its counterparties with credit exposure equivalent to the nominal value of receivables in US dollar from FX transactions, for...

[...] The objective of this study is to analyse - relying on 2006 data - FX settlement risk that may arise in the domestic banking system under its current operations, and to chart the changes which took place after 2000, covering improvements and, if necessary, formulating (new) recommendations...

The Global Financial Crisis initiated a period of market turbulence and increased counterparty risk for financial institutions. Even though the Dodd–Frank Act is likely to exempt interbank foreign exchange trading from a central counterparty mandate, market participants have the option to...