13-48 Settlement risk on wire transfers involves intraday credit risk.

Name: 13-48 Settlement risk on wire transfers involves intraday credit risk.
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Question

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Settlement risk on wire transfers involves the risk that one party may deliver the funds while the other party fails to deliver the securities or other assets. This creates intraday credit risk, which is the risk that a bank may extend credit to a counterparty for a wire transfer that may not be settled later in the day.

13-48 Settlement Risk on Wire Transfers Involves Intraday Credit Risk