Settlement Finality Principle Definition: The governing principle within a Real Time Gross Settlement (RTGS) System that once a payment has been submitted to and processed by the RTGS the payment/settlement is final and irrevocable. Details: The finality principle comes from the juridical domain where has the meaning that certain disputes must achieve a resolution from… Read More »
Settlement Account Definition: An account with the Central Bank, which is maintained in the RTGS (Real Time Gross Settlement) system by a Participant institution subject to the rules and procedures of the RTGS system. An account with a Central Bank, a settlement agent, or a counter-party, used to hold funds and securities and to settle… Read More »
Settlement Definition: Settlement at the Central Bank is a process (operation) through which actual funds transfer is executed between the settlement accounts of the sending and receiving institution held with the Central Bank in the RTGS (Real Time Gross Settlement) system. Settlement is the mechanism by which obligations in respect of funds transfer or in respect of… Read More »
Liquidity Definition: The ability of a settlement system participant to meet its current obligations in respect of funds and/or securities transfer. The liquidity of a Participant in the settlement system is measured by four components: Available balance (funds) on the current account Queued payment transfers from other participants in the settlement system to its account… Read More »
Clearing House Definition: A multilateral system or arrangement that provides its Participants with clearing services for payment instructions, securities transactions, derivatives transactions, and in some cases, settlement services. Details: The most famous example of a clearing house is “The Automated Clearing House (ACH) Network” the electronic funds-transfer system run by NACHA, since 1974. ACH provides… Read More »
Collateral Definition: An asset that is delivered by the collateral provider to secure an obligation to the collateral taker. Collateral arrangements may take different legal forms. Collateral may be obtained using the method of title transfer or pledge of assets. An asset or third-party commitment that is used by a collateral provider to secure an… Read More »
Clearing Definition: The process of transmitting, reconciling and, in some cases, confirming transactions prior to settlement, potentially including the netting of transactions and the establishment of final positions for settlement. Sometimes this term is also used (imprecisely) to cover settlement. For the clearing of futures and options, this term also refers to the daily balancing… Read More »
Available Balance Definition: The total funds a participant in a payment system has available for settlement of transactions at any moment. Calculated as a total of some pre-defined components: opening balance net value of credits and debits processed but not applied yes usable minimum reserve requirement account limits collaterals (loans, pledged securities, pledged stock options… Read More »
Acceptance for Settlement Definition: The moment at which a payment transaction becomes irrevocable as far as the sender is concerned. This is the point at which a transaction passes the tests to determine whether there is sufficient collateral for the transaction to proceed. Details: You have to see this as the last stage of a… Read More »
This post is more like a personal note of the resources indicated by Balaji as a must read if you want to start the journey of understanding crypto currencies and the underlying technology. Mastering Bitcoin Mastering Bitcoin is a book for developers, although the first two chapters cover bitcoin at a level that is also… Read More »