Regulatory Alerts2013-03-16
Final Guidance on Managing Risks in Foreign Exchange Settlement
The Basle Committee on Banking Supervision issued final guidance updating the 2000 framework to address a broader spectrum of risks in foreign exchange settlement, covering governance, principal, liquidity, operational, legal, and capital requirements. Banks must integrate these seven specific guidelines into their internal governance and risk management policies while prioritizing payment-versus-payment arrangements to mitigate principal risk. This updated framework responds to rapid foreign exchange trading growth and ensures comprehensive, standardized risk management across the full lifecycle of FX transactions.
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