Herstatt risk (principal risk)

The risk that, in a foreign exchange transaction, one party will pay out the currency it has sold – in this case: DEM – is paid out. However, the contracting party is not in a position to deliver the purchased currency – in this case: USD – also to deliver (the danger of loss in foreign exchange trading that one party will deliver foreign exchange but the counterparty will fail to bring its end of the contract). – See foreign exchange forward, settlement risk, Herstatt default, matching, quanto, rollover risk, swap transaction,

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/