Banks are underestimating the risk that their trading partners on the foreign exchange market may fail to honor commitments, global regulators said.

The Basel Committee on Banking Supervision issued draft guidance to lenders to bolster safeguards against the possibility that trades may break down before they are settled.

Banks should set binding limits on the amount of settlement risk they take onto their books, and restrict the amount of business they do with any single counterparty.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.