Five international banks to join Chaps
20 December 2013 | 2304 views | 0
CHAPS Clearing Company Limited, the UK payments system that processes and settles both systemically important and time-dependent payments, today (Friday 20th December), announced that it has received Letters of Intent from five major international banks to become Direct Participants.
A Direct Participant of CHAPS is able to send and receive irrevocable, guaranteed sterling payments with same day settlement finality. A Letter of Intent expresses a commitment to join the CHAPS Scheme within an agreed time frame.
As set out in the Bank of England Quarterly Bulletin, the five Banks who have decided to become settlement banks are: BNY Mellon, ING Bank N.V, Northern Trust, BNP Paribas and Société Générale. These banks are currently Indirect Participants of CHAPS. A total of twenty-five banks will be CHAPS Direct Participants by the end of 2015, an increase of eleven since the 2007-2008 financial crisis.
The banks who have expressed their intention to join CHAPS were identified as a result of changes brought about to reduce systemic risk within the CHAPS system. This has been achieved by highlighting those Indirect Participants who process payments above a certain value threshold. These changes are embodied within the CHAPS Tiering Criteria which were put in place in April 2012.
Last month, Swedish bank, Handelsbanken (Svenska Handelsbanken AB (Publ)) joined CHAPS as a full Direct Participant independently of the Bank of England's detiering initiative.