Clearing (the clearing of payments) is the process by which an intermediary entity acts to ensure a transaction is carried out, from the initial agreement between the two counterparties to the actual transfer of money from one bank account to another. The intermediary entity effectively adopts the role of both counterparties to carry out the […]

close-out netting

Close-out netting is a netting method that reduces pre-settlement credit risk. It only applies to transactions between parties where there is a default. Advantages of close-out netting In close-out netting, the non-defaulting company is no longer subject to contractual obligations to a defaulting counterparty. The positive and negative values are then combined into either a […]

closed forward contract

A closed forward contract is a contractual agreement to buy or sell a specified amount of one currency against payment in another currency at a specified date in the future known as the ‘value date’. By contrast, when both parties can exchange the funds before the value date, the forward contract is said to be […]


Collateral is the security required from the borrower in all kinds of financial transactions. It protects lenders against the risk of a payment default. If a borrower fails to pay the amount owed on the due date, the lender can claim the collateral in order to minimise losses from the defaulted payment. Collateral is a […]


Il collaterale è una garanzia richiesta al debitore in tutte le tipologie di transazioni finanziarie. Tutela i creditori dal rischio di mancato pagamento. Se un debitore non versa la somma dovuta entro la data di scadenza, il creditore può rivendicare il collaterale al fine di minimizzare le perdite dovute al mancato pagamento. La rivendicazione del […]

constant currencies

Constant currencies is a term that refers to a fixed exchange rate that eliminates fluctuations when calculating financial performance figures. Companies with significant operations in other countries often represent their earnings in constant currency terms since floating exchange rates can often mask true performance. Since the performance of a company is accurately depicted by its […]

constant currency measures/reporting

Constant currency measures reporting is an accounting technique used by companies to present financials year-over-year for comparative purposes without the effects of currency movements. For example, a company can calculate constant currency buy taking the last period’s exchange rates and applying them to this period’s results. Although it allows for year-over-year comparisons, constant currency measures […]

contrat forward

Le contrat à terme ou forward contract en anglais est un accord permettant de bénéficier du taux de change d’aujourd’hui à une date ultérieure. C’est un instrument financier simple mais incontournable et efficace pour compenser le risque du taux de change. Avec un contrat à terme, vous « verrouillez » le taux de change d’aujourd’hui […]

cost centre treasury

Cost centre treasury is a type of governance in which the costs of the treasury department can be charged to the various other departments/subsidiaries on some basis that is seen to fairly reflect the benefits the other department/subsidiary obtains from the treasury department and the use it makes of the treasury services. If it is […]


On a forward currency contract, the counterparty —that is, the opposing party in the transaction— is generally a large bank with international operations. Because typically no money changes hands at the outset of a forward currency contract, the counterparty risk is limited to the profit or loss on the contract; it is not the notional […]