- Bilateral Credit Limit
- Intraday credit limits set by two institutions for use with one another, usually within a large clearing system that operates by netting amounts due to and due from institutions by other members on a daily basis. Within the banking community, the most well-known clearing system that uses netting as the mechanism for settlement is the Clearing House Interbank Payments System (CHIPS) in the United States.
The purpose of bilateral credit limits is to reduce the credit risk exposure of each member institution to another, and to ensure the stability of the payment system overall in case one institution fails to deliver on its obligations.
In addition to bilateral credit limits, the payment systems usually have aggregate credit limits, which limit one institution's intraday obligation to all members of the system collectively. Another large payment system, Fedwire, also uses credit limits, although its settlement is known as real-time gross settlement, rather than netting.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
bilateral credit — UK US noun [U] MONEY ► a situation in which two people or groups agree not to ask for debts to be paid for a particular period of time: »Risks may be controlled centrally by obliging a participant to establish a bilateral credit limit with every… … Financial and business terms
credit — an entry made on the right hand side of an account and indicating a gain to a liability, owner s equity or revenue account. Glossary of Business Terms money loaned. Bloomberg Financial Dictionary * * * ▪ I. credit cred‧it 1 [ˈkredt] noun 1.… … Financial and business terms
Credit — Money loaned. The New York Times Financial Glossary * * * ▪ I. credit cred‧it 1 [ˈkredt] noun 1. [uncountable] COMMERCE an arrangement with a shop, supplier etc to buy something now and pay for it later: • They are saving for new furniture… … Financial and business terms
Export credit agency — Export credit agencies, known in trade finance as ECAs, are private or quasi governmental institutions that act as intermediaries between national governments and exporters to issue export financing. The financing can take the form of credits… … Wikipedia
двусторонний кредитный лимит — См. кредитный лимит. [Глоссарий терминов, используемых в платежных и расчетных системах. Комитет по платежным и расчетным системам Банка международных расчетов. Базель, Швейцария, март 2003 г.] Тематики платежные и расчетные системы EN bilateral… … Справочник технического переводчика
Magnetic stripe card — An example of the reverse side of a typical credit card: Green circle #1 labels the Magnetic stripe A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron based magnetic particles on a band of… … Wikipedia
United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… … Universalium
japan — japanner, n. /jeuh pan /, n., adj., v., japanned, japanning. n. 1. any of various hard, durable, black varnishes, originally from Japan, for coating wood, metal, or other surfaces. 2. work varnished and figured in the Japanese manner. 3. Japans,… … Universalium
Japan — /jeuh pan /, n. 1. a constitutional monarchy on a chain of islands off the E coast of Asia: main islands, Hokkaido, Honshu, Kyushu, and Shikoku. 125,716,637; 141,529 sq. mi. (366,560 sq. km). Cap.: Tokyo. Japanese, Nihon, Nippon. 2. Sea of, the… … Universalium
international relations — a branch of political science dealing with the relations between nations. [1970 75] * * * Study of the relations of states with each other and with international organizations and certain subnational entities (e.g., bureaucracies and political… … Universalium