Cash Netting Services
Capital enhancement, risk reduction and compliance benefits
Reduction in payment value reduces size of required liquidity buffers.
Reduced debt costs and associated improved income from profitable reuse of assets estimated at 100-150bp for major currencies.
Netting efficiency (modelled at over 90% reduction in payments volumes) delivers savings of $’00 millions per annum to international banks.
CNS (treated as other netting services) can reduce capital held against Liquidity Coverage Ratio, releasing significant HQLA to the business.
CNS requires minimal operational change; banks maintain existing settlement and reconciliation workflows.
Fewer interbank payment transactions reduces transaction failures (netting community is
Coordination of payment timings across banks leads to lower net exposures.
Session times and maximum gross exposures agreed between each netting pair further reduces counterparty risk.
Reduced payments volumes means lower payment transaction costs and associated messaging charges.
CNS re-uses well tried and tested software utilised by major CLS members and RTGS systems. Implementation is simple and straightforward.