Daily high value interbank payments are estimated at $10 trillion. Payments netting could reduce this amount significantly.
Intraday capital markets activity – and associated regulatory and risk requirements – require banks to hold significant cash balances
Cost of intraday liquidity significant and increasingly transparent at product and asset class level (BCBS 248)
Earnings opportunity cost of cash needed to support interbank payments flow
By reducing intraday cash and liquidity buffers, bilateral intraday netting could release (estimated) $1 trillion of this value
Analysis of bank payments data (simulated netting scenarios) suggests netting could achieve 90% payments compression and c.$50-$100m P&L benefit per $100 billion netted
Cash Netting Services : a unique focus on cash flow