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RBA Glossary definition for settlement

settlement – The discharge of obligations arising from fund transfers between two or more parties.

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The Impact of Tiering on Risk

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Each colour in the figure represents one of the 4 largest settlement banks. ... Consequently, in choosing to tier the client becomes operationally dependent on its settlement bank.
https://www.rba.gov.au/publications/rdp/2012/2012-06/impact-tier-risk.html

Introduction

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Download the Paper 862. KB. Most high-value payment systems settle payments on a real-time gross settlement (RTGS) basis. ... Credit risk arises because the settlement bank and its client(s) are exposed to the failure of each other.
https://www.rba.gov.au/publications/rdp/2012/2012-06/introduction.html

Australia's RTGS System

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Participants can amend the status of payments at any time prior to settlement. ... to hold a settlement account with the RBA to allow them to participate directly in RITS.
https://www.rba.gov.au/publications/rdp/2012/2012-06/aus-system.html

Methodology

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
all smaller institutions were taken as given, the choice of settlement bank differed only in four cases. ... Alternatively, we could have assumed that the settlement bank increases the liquidity it accesses (e.g.
https://www.rba.gov.au/publications/rdp/2012/2012-06/methodology.html

The Impact of Payment System Design on Tiering Incentives

30 Oct 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/2012/2012-06.html

Appendix B: Decomposing Liquidity Savings

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Any reduction in liquidity usage in this case will be due to transactions between the client and the settlement bank being settled outside the RTGS system. ... For example, consider initially that participant B acts as settlement bank for participant A.
https://www.rba.gov.au/publications/rdp/2012/2012-06/appendix-b.html

Appendix A: Sub-limits and Bilateral Offsetting

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Time when submitted to the simulator. Deferred. Active. Active. Settlement time in RITS. ... Priority. Priority. Settlement time in RITS. Active. Active. Active. Submission time to RITS.
https://www.rba.gov.au/publications/rdp/2012/2012-06/appendix-a.html

References

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Australian Prudential Regulation Authority and Reserve Bank of Australia (2003), ‘Management of Exchange Settlement Accounts’, Joint Media Release, 26 March. ... 228. Gallagher P, J Gauntlett and D Sunner (2010), ‘Real-Time Gross Settlement in
https://www.rba.gov.au/publications/rdp/2012/2012-06/references.html

The Impact of Payment System Design on Tiering Incentives

1 Oct 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/2012/2012-06/

The Benefits and Costs of Tiering

31 Dec 2012 RDP 2012-06
Robert Arculus, Jennifer Hancock and Greg Moran
intraday credit and the latter due to the settlement bank's role as holder of the relevant accounts. ... To manage this change in credit risk, settlement banks may well react by reducing the credit they extend to their clients in times of stress.
https://www.rba.gov.au/publications/rdp/2012/2012-06/benefits-costs-tiering.html