Appendix: Settlement Risk and Systemic Risk

Johannes Wernz

Chapter 13 in Bank Management and Control, 2014, pp 105-106 from Springer

Abstract: Abstract The settlement risk, also known as “Herstatt risk,” is the risk of losing receivables during the settlement period. The Herstatt-Bank of Cologne/Germany went bankrupt in 1974. A few banks had already made their payments in Deutsche Mark “DM” to Herstatt and lost the equivalent in U.S. dollars as Herstatt was unable to make the payment.

Keywords: External Rating; Interest Rate Risk; Risk Weight; Capital Charge; Counterparty Risk (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-3-642-40374-3_13

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