Settlement risk
Settlement risk, also known as the Herstatt risk is the risk that a counterparty does not deliver security or its value in cash as per agreement when the security was traded after other counterparty or counterparties have delivered security or cash value as per the trade agreement.
External links
- riskglossary.com has a detailed article on settlement risk, including an explanation of the origins of the name "Herstatt risk.".
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