clearing and settlement mechanisms

JAlvaro

Senior Member
Ecuador/Spanish
Hello

I'm trying to give sense this terminology, but it's so hard to me, does anybody know what clearing and settlement mechanism means in this context:

Some firms connect to the clearing and settlement mechanisms through correspondents (ie nostro agents). The decision as to wheter to utilise a nostro agent involves considerations of simplicity of operations, cost, and suitable collateral in the right place.

Thanks for all
 
  • Kelly B

    Senior Member
    USA English
    I'm not sure I'll be any help even with more context, but I'll ask for it anyhow.... Thanks for giving the sentences; can you also explain what these agents do? what sort of transactions are being discussed here? What kinds of businesses are involved?
     

    TrentinaNE

    Senior Member
    USA
    English (American)
    JAlvaro said:
    I'm trying to give sense this terminology, but it's so hard to me, does anybody know what clearing and settlement mechanism means in this context:
    These sound like financial terms in the context of funds transfers. Have you tried using Google? You may find some useful sites that way.

    Elisabetta
     

    cuchuflete

    Senior Member
    EEUU-inglés
    Here is what very little I know. A nostro agent deals on behalf of clients in the foreign exchange markets. I've found the term used mostly in reference to the CLS system (Continuous Linked Settlement). It appears to be a non-central bank clearing mechanism for settlement of Fx trades.

    Sorry Jalvaro, but this one is beyond my knowledge.

    Nostro account: A banking term to describe an account that a bank holds with a foreign bank. Nostro accounts are usually in the currency of the foreign country. en.wikipedia.org/wiki/Nostro

    See this also...it's more complete: http://en.wikipedia.org/wiki/Vostro_account
     

    mcarringt

    New Member
    English
    Hello

    I'm trying to give sense this terminology, but it's so hard to me, does anybody know what clearing and settlement mechanism means in this context:

    Some firms connect to the clearing and settlement mechanisms through correspondents (ie nostro agents). The decision as to wheter to utilise a nostro agent involves considerations of simplicity of operations, cost, and suitable collateral in the right place.

    Thanks for all
    Clearing and Settlement Mechanisms in this context means the systems put in place to actually make the settlement between two member banks in respect of the funds transfers made prior to settlement. In the SEPA (Euro) world a number of organisation provide a CSM function, EBA is a commonly used CSM
     
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