Intraday foreign exchange swaps are a new financial product for commercial banks to actively manage their intraday liquidity positions. The near leg of the swap is settled payment versus payment through a service such as CLSNow (for the euro, sterling, dollar, Canadian dollar and Swiss franc). The far leg is settled payment versus payment at a time pre-agreed by the transacting banks, a few hours later on T+0. In the future, intraday foreign exchange swaps could settle on new payment systems, such as the Fnality Payment System.
Intraday foreign exchange swaps have implications for prudential regulation and monetary policy. On the regulatory side, commercial banks will use them to improve their compliance with national implementations of BCBS248 (intraday liquidity monitoring) and BCBS144 (liquidity principles). On the monetary side, it could result in less reliance on central bank facilities and raise questions about central banks paying 24 hours of interest for overnight reserves.
NatWest, Deutsche Bank and nine other banks trialled intraday foreign exchange swaps earlier in 2021. The main purpose of this roundtable is to raise awareness among the regulatory and central bank communities and to gather feedback. The discussion is co-sponsored by two of the organisations at the forefront of this development, NatWest and Finteum, and will be organised and moderated by OMFIF.
Speakers will be announced shortly
09:00-10:15 (New York)
This meeting will be conducted under the OMFIF Rules.
This virtual discussion is part of the OMFIF Digital Monetary Institute. The OMFIF Digital Monetary Institute is a high-level forum which convenes key policy-makers, technology experts, investors and regulators to explore the challenges, opportunities and implications of digital finance in the 2020s. See more information on OMFIF’s DMI here. Please contact firstname.lastname@example.org directly for membership details or register your interest below and we’ll be in touch.