What is the name of the risk that a financial institution may not deliver the currency on one side of a completed currency transaction?

Question

Quizplus · Accepted Answer

Herstatt risk, also known as settlement risk, occurs when a financial institution fails to deliver the currency on one side of a completed currency transaction, leaving the counterparty with a loss. This risk is named after the German bank that famously failed to deliver the Deutsche mark in the 1970s, leading to losses for its counterparties.

What Is the Name of the Risk That a Financial