FNA Papers Series: No. 4 | 2023

 

Written by: 

José Fernando Moreno Gutiérrez (FNA)

|  Dr Carlos León (FNA & Tilburg University)

Dr Kimmo Soramäki (FNA) 

 

León, C., Gutiérrez J., Soramäki K., (2023). Making Atomic Settlement Work in a Positive Interest Rate Environment. FNA Papers, No. 4- 2023

 

In some cases, settling transactions instantaneously demands more liquidity, offering more risks than benefits, particularly in high interest-rate environments.

In this paper, Carlos LeónJosé Fernando Moreno Gutiérrez and Kimmo Soramäki explore atomic settlement and how it can be more liquidity-efficient in a positive interest rate environment through the deployment of smart algorithms to resequence payments before they are settled.

 

Introduction: 

Under the concept of atomic settlement, the time between the trade and the settlement of transactions is reduced to a very small fraction of time (e.g., seconds or less), making them instantaneous. A second feature is the exchange of all the assets in the transaction in a single event, making them simultaneous — no delivery or payment occurs if the others do not occur too, commonly known as delivery versus payment (DvP) or payment versus payment (PvP).

 

Download the Paper > 

 

About the Authors:

 

Jose Fernando Moreno Gutiérrez

FNA | Jose.m@fna.fi

José Fernando Moreno Gutiérrez has a diverse work experience in the field of data science and financial analysis. José Fernando is currently working as a Senior Data Scientist at FNA since June 2022. Prior to this, they worked at Nemuru as a Lead Data Scientist from January 2021 to June 2022, and as a Senior Data Scientist from February 2019 to January 2021. Before joining Nemuru, they worked at Bluecap Management Consulting, where they held multiple roles including Project Lead from July 2018 to January 2019, Big Data Analyst from September 2017 to July 2018, and Data

LinkedIn >

 

Carlos León

FNA & Tilburg University | Carlos@fna.fi

Carlos is the Director of Financial Markets Infrastructures and Digital Currencies Solutions at FNA, where he is one of the subject matter experts on network analysis for payments and financial market infrastructures. He has worked as a Senior Researcher at the Central Bank of Colombia and as a Short-term Expert for the International Monetary Fund. Carlos has published 26 articles in Scopus-indexed peer-reviewed journals that have been cited in 133 Scopus-indexed academic publications. He holds an MSc in Banking and Finance from Université de Lausanne (Switzerland) and a PhD in Finance related to network analysis from Tilburg University (The Netherlands). 

LinkedIn > 

Kimmo Soramäki

FNA | kimmo@fna.fi

Kimmo Soramäki is the Founder and CEO of FNA and the author of “Network Theory and Financial Risk”. He has over 25 years of experience working with Central Banks and Financial Market Infrastructures. In 1997, Kimmo developed the world’s first simulation model for interbank payment systems – and since then, has been regularly invited to lead and contribute to simulation and payment system innovation projects with organisations like Bank of England, CLS, Payments Canada or SWIFT. He is a frequent speaker at industry events and has written over 50 articles that have been cited in more than 2000 academic publications. Kimmo has an MSc in Finance and a DSc in Operations Research, both from Aalto University (Finland).

 

 

 

 

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