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Citigroup Inc. (NYSE: C)
April 14, 2008
Citi Launches Domestic Settlement Service for Interbank Forex Trades in Hong Kong
Hong Kong – Citi has announced the launch of its Domestic Settlement Service for interbank foreign exchange trades globally. Developed for use by Central Banks in developing markets, Citi's Domestic Settlement Service reduces settlement risk by simultaneously settling both sides of foreign exchange transactions. This service is now available for clients globally.
"With the rapid growth of high value foreign exchange trades, addressing interbank settlement risk is more significant than ever. Given Citi's settlement expertise, knowledge of local markets, and best-in-class infrastructure, our Domestic Settlement Service will help reduce settlement risk for banks in developing markets around the region," said Akash Rathke, Managing Director, Region Head of Bank Services and Public Sector, Asia Pacific, Citi Global Transaction Services.
Foreign exchange trades inherently have high settlement risk due to the two-sided nature of the contract, where a timing lag in payments can occur between participants. In this scenario one party can default before the funds are settled, leaving the other exposed to significant loss. Many countries operate payment infrastructures that lack the capability to support a settlement process where both sides of a trade are settled simultaneously.
In contrast, Citi's Domestic Settlement Service provides the simultaneous settlement of both sides of a foreign exchange trade with netted payments, helping to mitigate settlement risk and enhance operational efficiencies. Citi intends to extend this capability to Central Banks interested in upgrading their foreign exchange settlement infrastructure. Citi was commended for this solution in The Banker's 2007 Technology Awards.
"Throughout the years we have provided innovative solutions to all areas of the regional financial market. Through the Domestic Settlement Service, Citi is again at the forefront of the market, providing a tool that produces greater transparency and efficiency in foreign exchange trades for our bank services clients," said Anthony Nappi, Managing Director, Region Head of Global Transaction Services, Asia Pacific, Citi.
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Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.