Settlement Risk Key Performance Indicators (KPIs)

This Settlement Risk Key Performance Indicators (KPIs) tool provides guidance for assessing how digital exchanges, payment systems and financial-market participants manage settlement risk. It defines settlement risk as the possibility that either the buyer or seller, or both, cannot fulfill obligations in a transaction, including failure to pay or deliver because of time delay, system failure or default. This tool provides risk and control teams a structured way to identify exposures, review settlement arrangements and guide conversations about safeguards before a failure affects customers, transaction value, reputation, share price or crisis-management costs.

Key Features:

• Defines settlement risk and explains its relationship to credit risk, liquidity risk, legal risk, operational risk, and systemic risk
• Covers legal foundations, governance, risk limits, final settlement, netting, settlement assets, security, reliability, contingency planning, efficiency and fair access
• Addresses delivery-versus-payment, counterparty limits, currencies, failed transactions, margin, escrow, collateral and settlement finality