Settlement risk is important because
A)of the interdependent nature of many international transactions.
B)of the impact on sovereign country risk.
C)problems may induce countries to limit the freedom of international capital flows.
D)the electronic funds transfer network itself may become insolvent.
E)the Fed's guarantee may prove to be even more costly to the Federal government than the thrift debacle.

Question

Quizplus · Accepted Answer

Settlement risk is important because many international transactions are interdependent, meaning that the failure of one party to settle a transaction can lead to a chain reaction of failures across multiple parties. This can have significant ripple effects on financial markets and the global economy.

Settlement Risk Is Important Because