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- Title
How do different models of foreign exchange settlement influence the risks and benefits of global liquidity management?
- Abstract
The article discusses the approaches that financial groups use to manage liquidity risks. It states that financial groups fund obligations through intragroup, cross-currency and cross-border transfers of collateral. It explains that information about foreign exchange transactions must flow freely between two subsidiaries, but not between different banks. Different models of foreign exchange settlement which focus on payment details are also discussed.
- Subjects
LIQUIDITY (Economics); FOREIGN exchange rate risk; RISK management in business; INTERNATIONAL finance; BANKING industry; FINANCIAL institutions
- Publication
Bank of England Quarterly Bulletin, 2009, Vol 49, Issue 3, p234
- ISSN
0005-5166
- Publication type
Article