Bilateral Netting is a process used by banks to reduce the amount of money they owe each other. It is a form of risk management that allows banks to offset their mutual obligations and reduce their exposure to counterparty risk. The process involves two parties agreeing to exchange payments, with the net amount being the difference between the two. This reduces the amount of money that needs to be exchanged, as well as the amount of time and resources required to complete the transaction. Bilateral Netting is often used in conjunction with other risk management techniques, such as collateral management and credit derivatives.
Bilateral Netting is a popular tool among banks, as it helps them to reduce their costs and improve their liquidity. It is also used by other financial institutions, such as hedge funds and insurance companies.
Some companies in the Bilateral Netting market include Bank of America, JPMorgan Chase, Goldman Sachs, Citigroup, and Morgan Stanley. Show Less Read more
