Bilateral netting
5 definitions

An arrangement between two parties (which could be entities within the same group or third party organisations, but more frequently the former) to offset transactions between the parties and settle only the difference between them, either on a net or gross basis. This reduces the number of physical transfers that take place and therefore transaction costs. Bilateral netting cycles are typically run on monthly or another regular cycle.

FK Reading Ease
33.3

FK Grade Level
College
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  • An arrangement whereby two parties net their bilateral obligations.

    FK Reading Ease
    9.7

    FK Grade Level
    College
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  • "Bilateral netting": An arrangement between two parties to net their bilateral obligations. The obligations covered by the arrangement may arise from financial contracts, transfers or both. For example purchases between two subsidiaries of the same company may be netted against each other so that over time, typically one month, only the net difference is transferred.
    FK Reading Ease
    31.3

    FK Grade Level
    College
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  • An agreement between two counterparties to offset the value of all in-the-money contracts with all out-of-the-money contracts, resulting in a single net exposure amount that one counterparty owes to the other.

    FK Reading Ease
    31.6

    FK Grade Level
    Graduate School
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  • Consolidating cash flows from two different contracts or instruments.

    FK Reading Ease
    28.5

    FK Grade Level
    High School
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