A Historical Overview of Settlement Systems in the U.S.

CFSP
Publication Type: 
Other
Publication Year: 
2014

This summary explores how the structure of settlement systems for money and securities impact overall systemic risk. By looking at the transition in the U.S. from a bilateral gross settlement system to a multilateral net settlement system in 1892, an empirical study by Bernard Mc Sherry, Berry Wilson, and James McAndrews suggests that multilateral net settlement reduces broker insolvency and enhances system stability.

Region: 
Global
Topic: 
Financial Institutions
Topic: 
Policy Evaluation