Development Bank of Singapore (DBS Bank), Overseas-Chinese Banking Corporation Limited (OCBC Bank) and United Overseas Bank (UOB), have each taken an equity stake in the CLS Group, the bank-backed initiative to reduce the settlement lag in cross-border currency trading.
Explaining the decision to sign up to CLS, Enoch Ch'ng, executive director of the market infrastructure and risk advisory department in MAS, comments: "The increased consolidation of the global banking industry and growth in international trade have accentuated the need to mitigate the risks arising from foreign exchange transactions."
The Monetary Authority of Singapore (MAS) is reporting that it has received an in-principle agreement to include the Singapore dollar as an eligible currency of CLS Bank. The Singapore dollar will join the Australian dollar, Canadian dollar, Danish kroner, euro, Japanese yen, Norwegian krone, pound sterling, Swedish krona, Swiss franc and United States dollar as prospective CLS Bank eligible currencies.
The CLS Bank is a financial industry initiative to eliminate the settlement risk in cross-border currency trading. Originally slated for live trials this month, the initiative has been delayed pending the delivery of fully-functioning software from IBM.