Post Oak Labs Showcase · #25 of 33 Cross-Border FX Netting Simulator
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Demo #25 · Treasury · Multilateral Netting · Processors Hub
Editable 4×4 payable matrix Gross / bilateral / multilateral @ainumbers.co/fx-netting-v1

Settle the difference, not the gross.

Multilateral netting compresses cross-subsidiary FX settlement volume by 60–85% versus gross settlement on representative books. This lab models a synthetic 4-subsidiary × 3-currency book, lets you switch between gross / bilateral / multilateral settlement modes, and surfaces the resulting savings in FX spread paid, nostro capital freed, currency-pair compression, and Herstatt-style settlement-risk reduction. Exports as an AP2 treasury-policy mandate the runtime can enforce on every netting cycle.

Zero PII · Client-side Synthetic — illustrative. Real book economics depend on counterparty mix and FX desk arrangements. Last Reviewed · 2026-05-13
BIS Triennial · CLS Bank · Herstatt risk

The BIS Triennial Survey 2022 measured global FX turnover at $7.5 trillion per day. CLS Bank — the central PvP settlement infrastructure — settles roughly 50% of eligible FX volume and is itself a netting service. The Bank for International Settlements identified FX settlement risk (the Herstatt-style "one leg settled, counterparty fails before second leg" exposure) as the largest residual systemic risk in its 2022 Statement on Settlement Risk. Basel III LCR treats nostro deposits at correspondent banks as level-1/level-2 HQLA depending on jurisdiction — freeing nostro capital via netting directly improves the institution's LCR ratio.

Sources: BIS Triennial Central Bank Survey 2022 · CLS Bank annual reports · BIS-CPMI report on FX settlement risk (2022) · BCBS Basel III LCR · ISDA on bilateral & multilateral netting
§1 · Bilateral Payable Matrix 4 subs × 3 currencies

Who owes whom, by currency

Cell at row A, column B = subsidiary A owes subsidiary B in the selected currency, monthly aggregate (USD millions, FX-converted at internal rate). Diagonal is zeroed. Switch the currency tab to edit other-currency books.

§2 · Settlement Mode Multilateral

Choose the netting mode

Gross settles every cell. Bilateral nets each pair (A→B − B→A). Multilateral nets each subsidiary to a single net position per currency vs. a netting centre.

§3 · Economics & Risk FX spread × nostro × Herstatt

Pricing parameters

FX spread paid on gross (bps) Typical institutional 5–25bps; corridor / EM higher.
10 bps
Nostro funding cost (bps p.a.) Opportunity cost of capital tied up in correspondent nostro balances.
120 bps
Settlement window (hours) Drives Herstatt exposure window. CLS PvP collapses this; non-PvP rails do not.
6 h
§4 · Output Live

Netting economics

Gross volume (mo)
all currencies USD-eq
Net settlement (mo)
under chosen mode
Compression
vs gross
FX spread saved / yr
at chosen bps
Settlement compression
Net settled Eliminated by netting
Per-currency compression
Nostro freed
peak balance reduction
Herstatt risk
gross at-risk window
Netting posture — efficient.
AP2 v1.0 · valid · @ainumbers.co/fx-netting-v1
Payments & Treasury

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Post Oak Labs · production deployments in the Caribbean & South Asia · works with a limited number of institutions at a time
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