BME has taken a significant step in the field of currency exchange transactions by announcing the implementation of an innovative settlement system known as FXS, which has been approved by the Bank of Spain. This new system aims to improve efficiency in currency transactions and reduce the risks associated with bilateral settlement.
The FXS system aims to eliminate principal risk in currency exchange operations, a challenge that is a major concern for financial institutions, as it implies that one party could lose the entire amount if the other party does not deliver the agreed currency. With this solution, BME establishes itself as a leader in the foreign exchange market, effectively responding to the needs expressed by banks and financial institutions that have pointed out the limitations of bilateral settlements, including the excessive use of credit lines that can hinder business potential.
The implementation of the system in a payment versus payment mode will significantly reduce dependence on credit lines, accompanied by a notable increase in volume and the number of possible counterparties in transactions. The FXS will also offer additional efficiencies, such as integration with the SWIFT network and the possibility to net all transactions between two counterparties, thus simplifying the settlement process, reducing costs, and optimizing the use of available capital.
This system will be available to all financial operators within the European Union and Switzerland. According to data from the Bank for International Settlements, currency exchange transactions in Spain amount to approximately 18,000 million euros per day, which are currently exposed to bilateral risk.
José Manuel Ortiz, interim head of Securities Services, expressed his satisfaction with the launch of the FXS system, highlighting the importance of meeting customer needs. Ortiz emphasized that BME’s neutrality as a financial market operator, along with the strength of its technical infrastructure, guarantees high-quality service and availability for all users.
In addition, BME is exploring other initiatives to strengthen its presence in the currency sector, with the aim of expanding its range of assets and optimizing its technology and distribution capacity through its members.
Referrer: MiMub in Spanish
