Foreign exchange volumes passed through the consortium-backed continuous linked settlement (CLS) system are set to grow by 90% over the next 18 months forecasts TowerGroup
The prediction follows from research conducted among 41 CLS member banks and 36 third party customers.
The study projects that the volume of third party instructions will increase by a factor of five by the end of 2006. Usage of CLS Bank by current users is also set to rise, with the proportion of current member respondents settling over 50% of their daily value through CLS Bank growing from 60% now to 89% by the end of 2005.
The research also highlights the influence of CLS on the front office. Seventy-seven per cent of member respondents reported changes to the credit approval process for CLS counterparties, with 59% reducing use of credit limits, and 15% eliminating settlement limits for CLS counterparties.