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Banks find Basel proposal for forex unnecessary
Banks have branded as unnecessary a measure by the Basel Committee on Banking Supervision to increase capital holdings to provide a safety net for foreign exchange settlements. GFMA's Global FX Division said such a setup would run counter to recent efforts to reduce outstanding principal exposure. "With regard to any capitalization of settlement risk, the implied security of a capital charge would be small compared with the value of any actual settlement failure," said James Kemp, managing director of the division. "Prevention of settlement risk occurring therefore becomes paramount -- rather than attempting to insure against the loss."
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