Near 24/7 settlement plans raise funding and resolution concerns
The London FX Joint Standing Committee reviewed the Bank of England's push toward near 24/7 RTGS settlement alongside emerging cross-asset risks at its June 24 meeting. Members flagged funding challenges and the heavy investment required for round-the-clock operations.
Continuous settlement meets treasury friction
Bank of England officials Anna Koch and Richard Lewis presented plans to transition RTGS and CHAPS settlement toward near 24/7 operations, supported by a formal consultation paper.
Committee members noted that continuous operating models require extensive industry investment and alter treasury dynamics.
Financial stability and resolution mechanisms remain central concerns under round-the-clock settlement.
Market updates from Erik Norland of CME Group and Michael Metcalfe of State Street highlighted shifting cross-asset correlations, FX hedging dynamics, and the impact of geopolitical friction in the Middle East alongside artificial intelligence on trading flows.
From tokenisation to Code review
Natalie Lovell and James Kemp reported on the Global Foreign Exchange Committee, which created a Technology and Innovation Working Group ahead of the 2027 FX Global Code review.
The Operations Sub-Committee under James Kaye addressed atomic settlement, cross-border payments, and tokenisation.
Sharon Blackman reviewed competition guidelines for the Legal Sub-Committee, while Myles McGuiness outlined FMSB work on artificial intelligence governance and Oliver McCausland noted reporting reviews.
Ambitious vision, heavy operational friction
Near 24/7 wholesale settlement is technically ambitious but creates serious operational headaches for bank treasuries.
Expanding operational hours without robust resolution mechanisms risks amplifying systemic liquidity stress during market disruptions.
The industry faces steep compliance costs for a transition that offers fragmented immediate benefits.