What Is a Settlement Risk?

Settlement risk is a risk of banks in the settlement process, resulting in loss of work due to staff errors or violation of the relevant provisions of the settlement. Wrong account, such as a short paragraph in cash we deal with a certificate, promissory notes, transfer of funds and other processes occur, irregularities, misappropriation of funds, settlement and extension of pressure, those mistakes through effective management and staff to improve the quality of service can be avoided . ^[1]

Settlement risk

It is used to indicate the risk that the settlement in the transfer system cannot occur as expected. Such risks may include credit risk and liquidity risk.

Bank settlement process, resulting in a risk of loss due to errors in the work of staff or in violation of relevant provisions of the settlement. Wrong account, such as a short paragraph in cash we deal with a certificate, promissory notes, transfer of funds and other processes occur, irregularities, misappropriation of funds, settlement and extension of pressure, those mistakes through effective management and staff to improve the quality of service can be avoided . There is also the risk of a number of objective reasons.

Transaction settlement risk, also known as the commercial foreign exchange risk, which refers to the foreign currency denominated or traded in the transaction, since the ratio of foreign currency and local currency changes caused by the risk of loss, that is denominated in foreign currency transactions trading, because the transaction process foreign exchange changes in exchange rates make the currency actually paid

Bank Standard prescribes the accounting system are the bank's accounting practices.

Also known as the commercial foreign exchange risk, which refers to the foreign currency denominated or traded in the transaction, since the ratio of foreign currency and local currency changes caused by the risk of loss, that is denominated in foreign currency transactions trading, because of changes in the trading process in foreign exchange rates making changes in currency actually paid cash flow generated losses.

This foreign exchange risk is mainly accompanied by foreign exchange transactions in the purchase and sale of goods and services, and is mainly borne by general enterprises engaged in trading and non-trading business. Specifically, these transactions can be divided into two categories: one is the enterprise

Effective measures must be taken to prevent payment and settlement risks. Strengthening payment and settlement management and improving the accounting control system are the basis for preventing risks.

(A) establish and implement sound internal management and supervision and control mechanism to plug the loopholes, eliminate hidden dangers.

A sound internal management system is an important guarantee for preventing risks. Commercial banks are required to establish a scientifically sound, clear responsibilities of the internal management system and internal control system of the bank.

Establish and improve the post responsibility system. Business institutions should establish a system of accountability for accountants, and formulate corresponding restrictive measures for the business characteristics and business processes of each position and each link of the bank's accounting work, especially for important positions that are prone to cases. Personnel concurrently or operate the whole process alone. Periodic inspection, regular rotation, exchange and mandatory leave system must be implemented for key post personnel such as bookkeepers, reviewers, and city clearing agents; unqualified personnel in important positions must be resolutely adjusted. It also conducts exit audits and strictly handles handover procedures.

Establish an approval system for important matters. Accountants must handle the transactions according to valid vouchers that comply with the accounting system. They must not accept any instructions that do not comply with the system. Matters authorized to be processed by superior banks must perform necessary procedures. The preparation of internal vouchers and the correction of wrong accounts must be conducted by the accounting supervisor Review and sign; strengthen the management of temporary collection and temporary payment accounts, use strictly in accordance with the prescribed accounting scope, examine and approve in accordance with prescribed authority, and conduct regular inspections.

Establish an account checking system. Accounting accounts must adhere to the "six matching", that is, accounts, accounts, accounts, accounts, accounts, and internal and external accounts are reconciled. According to the requirements of the system, daily or regular verification of different accounts is required. Difficult to find alternatives. It is necessary to establish and improve the external reconciliation system, and regular post-hoc inspections will be performed by households to ensure that internal and external account reconciliations are consistent.

Establish an accounting ex post supervision system. Each bank's business department shall set up post-monitoring posts, conduct a comprehensive check on the accounting operations that occur every day, and the accounting supervisor shall conduct selective spot checks to detect and correct errors in a timely manner. It is necessary to strengthen the key supervision of important posts, especially those prone to cases, and implement a system of regular and irregular inspections by accountants.

Establish important blank certificate management systems. Voucher management must be led by a person, managed by a person, and stored in a special library. The receipt, receipt, and destruction of important blank credentials must be handled in accordance with the prescribed system. Implement a special person custody and account management system, strictly separate custody and issuance, use important daily vouchers for daily accounting, and provide necessary safety custody facilities.

(2) Strengthen the supervision of central bank payment and settlement risks to ensure the security of the payment system.

The main tasks of the People's Bank of China's payment and settlement management are to ensure the security of the payment and settlement system, monitor the liquidity and security of financial institutions' operating funds, and prevent commercial banks from turning contradictions in funds into payment and settlement contradictions, and avoid regional settlement and payment difficulties. It is necessary to regularly evaluate the reserve deposits of commercial banks and urge commercial banks to strengthen the scheduling and management of funds in the system; strengthen financial supervision and further implement the periodic and irregular inspection system for the implementation of the accounting system and the implementation of settlement discipline; Handle the remittance business of commercial banks, monitor the implementation of commercial banks' implementation of exchange rate funds management regulations, block channels for banks to overtake the exchange rate and carry out overload operations, ensure real-time settlement of large amounts of funds, and prevent payment risks; We will strengthen the security management of printing, escrow, machines, and certificates, strengthen anti-counterfeiting methods, and send them to designated manufacturers to explore the use of electronic anti-counterfeiting technology.

(3) Accurate and timely payment and settlement business in strict accordance with the Bill Law and the Measures for Payment and Settlement.

After the promulgation of the "Bill Law", supporting regulations such as "Implementation Measures for Bill Management" and "Measures for Payment and Settlement" have been promulgated successively, which have gradually settled the settlement management on the legal track, but there are still incomplete regulations and irregular bill behavior . It is necessary to further revise and improve the relevant settlement and joint bank systems, strengthen the publicity, implementation and implementation of the Bill Law and its supporting regulations, strengthen the management of payment settlement, and handle various businesses in accordance with the law. Strict examination of bills is required. The authenticity of the bills, the completeness of the items to be recorded, the continuity of endorsements, whether the changes are legal and effective, and whether they are lawful bearers, etc. must be strictly examined to avoid fraud due to inadequate review; Strictly pay large amounts of money, check in advance and pay important bills of the Bank, and strictly abide by various procedures for settlement business operations.

(4) Pay attention to computer security management and prevent system risks.

With the increasing application of computer technology in the field of payment and settlement, from microcomputer configuration to networked operation, it is increasingly important to strengthen security management. It is necessary to improve the accountability system for accounting computerization systems, strengthen accountability control, and separate four basically incompatible positions: program design, system daily management, computer operation, and data storage; strengthen computer system operation control to prevent unauthorized personnel from operating Computer, pay attention to input control and output control during operation. The input voucher must be reviewed and checked by two people. The output data must be manually checked. The post-monitor's daily statement issued by the computer and the manually-accounted daily statement should be checked. Conform to each other; earnestly implement the provisions of accounting computerized management business operations, and strengthen password, encryption and authority management. The operation password should be changed regularly to prevent loss of confidentiality. The management of magnetic media files should be strengthened. The daily business should be backed up and the magnetic media should be managed as accounting files.

(5) Strengthen business management and raise awareness of risk prevention.

Commercial banks should pay attention to the prevention of payment and settlement risks, strengthen business management, and control financial asset risks. To fully understand the urgency of the payment and settlement risk prevention, from all kinds of cases that have taken place in earnest to learn, pay full attention to internal control and risk prevention; to take measures to guard against the risk of payment, we must first strengthen management in accordance with the requirements of asset liability management firmly correct and severely crack down on illegal business activities, and secondly to establish the payment risk protection mechanism, a clear government responsibility for the Bank to dispose of the risks of various financial institutions, strengthen early warning and monitoring, development of interim relief programs and long-term security measures, all parties to work to resolve the risk. Third, we must reform and improve the financial system, implement prudent accounting principles, the implementation of loan classification, enough to mention the risk provisions, commercial banks to enhance the strength and development potential.

(F) enhancing staff management, improve the quality of accounting.

In the rapid development of China's financial industry today, the financial sector must have a good quality, well-trained team of accounting, the human factor is the determining factor. To implement qualifications of accounting personnel censorship. Changes in accounting office executives and staff must be carefully reviewed. To strengthen the training of accounting personnel, to take a variety of ways, education and training of accountants political ideology, ethics, laws and regulations, business knowledge, skills and computer knowledge. In the form of political learning, job training, business competitions, improving the quality of accounting personnel. Strengthen political and ideological education and legal education accounting personnel to enhance their legal awareness and professional ethics and awareness of risk prevention, prevent the occurrence of criminal cases. According to the needs of business development and accounting, the accounting staff to enrich reasonable, to ensure the implementation of various systems.