On Balance Sheet Netting Agreement

All unsecured deposits in all currencies are hedged between the designated offices of the two banks. Deposit clearing, which is carried out through the British Bankers Association`s International Deposit Netting Agreement, is a means of improving the liquidity of the interbank market while reducing counterparty risk and thus systemic risk. The impact of master clearing contracts on securities financing transactions (SFTs) may be recognised for the calculation of own funds requirements under the conditions and requirements set out in cre22.62 to CRE22.65. If securities transactions are subject to a master clearing agreement, whether held in the bank passbook or the trading book, a bank may decide not to offset the netting effects when calculating the capital. In this case, any transaction is subject to capital fees, as if there were no master clearing contract. .

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