Five international banks to join UK’s CHAPS system
Five international banks are to become direct participants in the UK’s CHAPS high-value payments system.
As direct participants, BNY Mellon, ING Bank, Northern Trust, BNP Paribas and Société Générale will be able to send and receive irrevocable, guaranteed sterling payments with same day settlement finality. They are all currently indirect participants in CHAPS.
A total of 25 banks will be CHAPS direct participants by the end of 2015, an increase of 11 since the 2007/2008 financial crisis, the company says.
The banks were identified as being indirect participants that process payments above a threshold of daily average settlement values in the region of £270 billion, with an average payment value of £2 million, which in turn serve several thousand other financial institutions on an indirect basis.
These changes are embodied within the CHAPS Tiering Criteria put in place in April 2012 by the Bank of England as part of moves to reduce systemic risk within the CHAPS system.
Last month, Swedish bank Handelsbanken joined CHAPS as a full direct participant independently of the Bank of England’s de-tiering initiative.