WSJ reports... “That two-day delay comes with various costs. Banks collectively set aside tens of billions of dollars in capital to cover the risk that firms elsewhere in DTCC’s network will fail before the trades settle.
There are also separate systems at each big bank, as well as at DTCC itself, that track what different market participants are expected to pay or deliver at settlement time. Bankers say this is inefficient and results in errors when systems disagree with each other.
‘We are constantly reconciling that data,’ said Jeffrey Rosen, a New York-based managing director at Société Générale. ‘That is hugely expensive. While we’ve built tools to do it efficiently, it would be better not to do it.’”
