Bank Business vocabulary Summary

1. Full settlement

Compared with the net settlement system, the final settlement of the processing process and fund transfer instructions in the real-time full settlement system (rtgs) occurs continuously in real time, and there is no difference between debit and credit, the system settlement process is based on real-time transfers of central bank funds. The rtgs system can reduce or even eliminate basic inter-line risks in settlement, shorten the generation of credit cycle and liquidity risks, which is the main motivation of the Central Bank to adopt rtgs in the large-amount transfer system.
Due to the broad definition, the rtgs system's processing design is also diversified, especially when the sending bank does not have enough Replenishment funds on the Central Bank's account, the implementation of payment processing will be significantly different, for example, the system rejects transfer instructions, queues in the central bank system, and uses the central bank's credit for settlement. These feasible payment processes do not need to be mutually exclusive, in recent years, rtgs, which is new or being improved, tends to use multiple methods.
In developed countries, the first automated rtgs system was the u. S. Fedwire. Its modern version was put into use in 1970. By the end of 1980s, the Netherlands, Sweden, Switzerland, Germany, Japan, Italy and other six countries in G10 had adopted the rtgs tool to establish a large transfer system. In 1990s, an updated rtgs system emerged. Some original systems also upgraded risk management capabilities and system architecture, or changed from the original net settlement system to the rtgs system.

2 net settlement

Net Settlement refers to the settlement system in which the securities registration and settlement institution balances the balances of the transactions purchased and sold by settlement participants and organizes settlement participants by means of net settlement. Net settlement can be divided into bilateral net settlement and multilateral net settlement. Bilateral net settlement refers to the settlement method in which the securities registration and settlement institution balances all the transactions concluded between the two parties. In this settlement mode, the transaction competitor is the settlement competitor. Multilateral net settlement means that the securities registration and settlement institution is involved in the transaction relationship between the two parties and becomes the "seller of all buyers" and "buyer of all sellers ", then, settlement participants are used to offset the amount of securities and funds payable for all transactions they have concluded, each settlement participant shall, based on the net amount of income obtained from the deviation, settle the settlement method with a settlement party of the securities registration and settlement institution.

3 rolling difference

There is no special legal definition. The title of the GAP calculation, hedging, and net improvement in Chinese are also related to the Gap calculation. The legal mechanism of the deviation is to use the offset, contract update, and other legal systems. The anbor CREDIT Research Center eventually obtains one amount of net Creditor's Rights or net debt from one party to the other, such as between market traders, multiple transactions may have the same content and have the opposite direction. When settlement or settlement is completed, the creditor's rights of all parties can be offset within the same amount and only the balance is paid. According to the content of the deviation, it can be divided into settlement netting and closed-out netting ), settlement deviation refers to the deviation operation performed by the transaction parties when the transaction ends normally. Settlement deviation usually clears the mutual debt claims of the same type before settlement. The purpose of settlement deviation is to reduce settlement risks and prevent the other party from going bankrupt before payment after payment by one party. Even if the payment is made on the same day, the settlement deviation is not only applicable to the payment system, it also applies to the delivery and settlement of foreign currency and securities, and the default rolling deviation refers to the breach by the transaction party, and the transaction party immediately terminates the outstanding contract (excutory contract) transaction, after the contract losses and earnings are offset, one party pays (or declares) only one balance to the other party, the main purpose of closing the transaction gap is to reduce the risk of a party's bankruptcy before the settlement date on the open contract. Of course, it can be used for credit risk control mainly to end transaction trade. In the United States, the anbor CREDIT Research Center's natural gas and the oil industry's final trade gap usually has a standard agreement that reflects the characteristics of the industry for reference. A Rolling contract consists of a master netting agreement (MNA) and a separate contract for each transaction. Once an operation is actually put into effect, the transaction is terminated. The key here is how to define "default", that is, what is the "trigger point" for executing the rolling operation? When something happens, it is defined as a default? Due to the huge impact on the close transaction, the triggered event cannot be regarded as a particularly sensitive event. It must be defined as an event with a significant impact on the default (overriding events of default, EOD), what kind of event is EOD, must be clearly defined in the total Rolling contract, in order to avoid the occurrence of a single transaction, the impact of a small breach of the event as EOD, the severity of the event is exaggerated, affecting the normal operation of the overall transaction.

4 positions

Positions are commonly used in the financial industry and are often used in finance, securities, stocks, and futures transactions. Actually, it means the balance.

For example:

Foreign currency position: the balance of various foreign currency accounts held by the foreign currency bank, that is, the balance of foreign currency trading of the foreign currency bank. When the foreign currency purchased by the foreign currency bank is greater than the foreign currency sold by the bank, the foreign currency position is long position, also known as overbought. When the foreign currency bank buys and sells the foreign currency, the balance of foreign currency positions is called square position. When the foreign currency bought by the foreign currency bank is smaller than the foreign currency sold by the bank, the foreign currency position is short or missing ), it is also called oversold ). The net balance calculated by the foreign currency plus the total amount for various periods held by the foreign currency bank is called the total position ).

A position is a market convention. The buyer of the futures contract is in the multi-headed (empty) position, and the seller of the futures contract is in the short (short selling) position. When creating a warehouse in a futures transaction, the position held after the futures contract is called a long position, referred to as a long position. The position held after the futures contract is sold is short. The difference between a long open contract and a short closed contract is called a net position.