References in periodicals archive ?
There is little reason to believe that e-money will greatly add to the credit, market, and Herstatt risks in payment systems in the short run.
They are typically categorized as credit or solvency risk, liquidity risk, market risk, Herstatt risk, fraud risk, operational risk, legal risk, and systemic risk.
It will also reduce liquidity, credit and Herstatt risks.(1)
There were obvious benefits if transactions between Hong Kong, mainland China and the United States could eventually be settled on a PvP basis, thereby eliminating Herstatt risks. Such risk is the greatest of potential market risks in the East Asian time zone in view of the 12-hour time difference with New York and the fact that mainland China and the United States are Hong Kong's largest trading partners.
For example, most Asian financial markets are connected to the two largest International Central Securities Depositories--Euroclear and Cedel--which clear Asian paper in European time and give rise to Herstatt risk. In addition, ECHO and Multinet activities would mean that most netting of foreign exchange trading in Asia would be carried out on New York or London time.