Settlement Models
Learner compares gross settlement, net settlement, deferred net settlement, and real-time gross settlement, and explains finality, timing, and liquidity needs for each model. Learner practises this skill on realistic banking cases, explaining the reasoning clearly and using correct terminology throughout the work.
Settlement models: RTGS, deferred net settlement and prefunded models, and how a bank chooses between them.
What You Can Do After This Chapter
Learning objective. Learner compares gross settlement, net settlement, deferred net settlement, and real-time gross settlement, and explains finality, timing, and liquidity needs for each model. Learner practises this skill on realistic banking cases, explaining the reasoning clearly and using correct terminology throughout the work.
Practical assessment. Learner receives four payment scenarios, including a 1,000,000 pound interbank settlement and a 200 euro retail batch, and assigns each to gross, net, deferred net, or real-time gross settlement with reasons. Learner then draws the settlement timeline for a deferred net system, marking the cut-off, netting, and settlement points, and states when finality occurs. Learner presents the work with calculations and assumptions stated clearly, then reviews it against the chapter checklist and corrects any gaps before submission.
Expected deliverables.
- Settlement model comparison table
- Model assignment sheet for four scenarios
- Deferred net settlement timeline diagram
- Finality explainer per model
Completion criterion. Learner assigns at least three of four scenarios correctly, draws the deferred net timeline accurately, and states the finality point for each model. Judgement covers accuracy, completeness, and clear written explanation in the submitted work.