Unsettling: the increase of foreign exchange without settlement risk mitigation
The Bank for International Settlements’ Quarterly Review (December 2019) suggests that FX settlement risk is on the rise. Further, and of note, FX settlement risk is growing in currencies not eligible for settlement in CLS.
We believe now is the time to address and reverse the build-up of FX settlement risk. Without immediate action, FX settlement risk will continue to accumulate and, in parallel, so will the risk to the global financial system.