C
   
   Cross-Currency Settlement Risk
   















 

C

Cross-Currency Settlement Risk

The risk that one party to a currency swap will default after the other side has met its obligation, usually due to a difference in time zones. Also called Herstatt Risk after a failed German bank which generated such a default on a large scale.

Further methods of reducing settlement risk are discussed in "Key Risk Concepts: Settlement Risk."

Glossary * C