A bank's actual exposure - the amount at risk - when settling a foreign exchange trade equals the full amount of the currency purchased and lasts from the time a payment instruction for the currency sold can no longer be cancelled unilaterally until the time the currency purchased is received with finality.

2. It is important to note that this definition is designed to address the size and duration of the credit exposure that can arise during the settlement process. It says nothing about the probability of the occurrence of an actual loss. The definition also does not specifically address the ability of a bank to measure and to control its FX settlement exposure at a particular moment. To develop a practical methodology for measuring current and future FX settlement exposures in a manner consistent with the above definition, a bank would need to recognise the changing status - and, hence, the changing potential settlement exposure - of each of its trades during the settlement process.