Echo Closure Ends Multilateral Netting Era; Leaving Risk Gap

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LONDON--The suspension of services by the Exchange Clearing House Limited (Echo) last week marks the demise of multilateral netting as a counterweight to foreign exchange settlement risk. Furthermore, with the launch of continuous linked settlement by CLS Services (CLSS) still more than 18 months away, the market faces a breach in its options for minimizing settlement risk.

Echo was the last of two multilateral netting services acquired last January by CLSS, the consortium bank-owned company

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