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   Bilateral Netting
   















 

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Bilateral Netting

An arrangement between two parties in which they exchange only the net difference in their obligations to each other. The primary purpose of netting is to reduce exposure to credit/settlement risk. See also Netting Agreement, Netting by Novation.

For a further discussion of the various types of netting, see "Key Risk Concepts: Netting & Insolvency"

Glossary * B