Delivery/settlement risk

  Credit risk on the delivery date, resulting in a loss of the incoming cash flow under any contract which entails the exchange of cash flows on the delivery date.

International financial encyclopaedia . 2014.

Look at other dictionaries:

  • settlement risk — The risk that a transaction will not be settled as expected (i. e. that an agreed delivery or payment will not be made). It is sometimes referred to as Herstatt risk after a bank of that name, which failed to honour its foreign exchange… …   Big dictionary of business and management

  • Settlement (finance) — Settlement (of securities) is the process whereby securities or interests in securities are delivered, usually against payment, to fulfill contractual obligations, such as those arising under securities trades. This involves the delivery of… …   Wikipedia

  • Delivery Risk — The risk that a counterparty in a transaction may not be able to fulfill its side of the agreement by failing to deliver the underlying asset or the cash value of the contract. Also called settlement risk. In the foreign exchange context,… …   Investment dictionary

  • delivery versus payment — delivery vs. payment ( DVP) The simultaneous exchange of securities and cash. The safest method of settling either the purchase or sale of a security. In a DVP settlement, the funds are wired from the buyer s account and the security is delivered …   Financial and business terms

  • Delivery risk —   In all foreign currency transaction there is a delivery risk between currency settlement hours outside the country involved and the actual settlement hours in the country of the currency. The risk is equal to the full amount of the transaction… …   International financial encyclopaedia

  • Delivery versus payment — Payment at the moment of delivery .[1] Delivery versus payment or DVP is a sale transaction of negotiable securities (in exchange for cash payment) that can be instructed to a settlement agent using SWIFT Message Type MT 543 (in the ISO15022… …   Wikipedia

  • Delivery Versus Payment — The acronym for DVP (delivery versus payment), or transactions in which there is simultaneous transfer of cash and securities following the trade. A basic feature of automated clearing and settlement, DVP reduces risk significantly: today fewer… …   Financial and business terms

  • Operational risk — Categories of financial risk Credit risk Concentration risk Market risk Interest rate risk Currency risk Equity risk Commodity risk Liquidity risk Refinancing risk …   Wikipedia

  • Continuous linked settlement — is a process by which a number of the world s largest banks manage settlement of foreign exchange amongst themselves (and their customers and other third parties). The process is managed by CLS Group Holdings AG and its subsidiary companies and… …   Wikipedia

  • Overnight delivery risk — A risk brought about because differences in time zones between settlement centers require that payment or delivery on one side of a transaction be made without knowing until the next day whether the funds have been received in an account on the… …   Financial and business terms

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