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5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
http://slidepdf.com/reader/full/intl-funds-transfer-systems 1/16
INTERNATIONAL FUNDS TRANSFER
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
http://slidepdf.com/reader/full/intl-funds-transfer-systems 2/16
CONTENTS
´ SWIFT
´ CHIPS
´
FEDWIRE´ CHAPS
´ TARGET
´ SEPA
´ NOSTRO
´ VOSTRO
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SWIFT
´ Society for Worldwide Interbank FinancialTelecommunications (SWIFT)
´ Commercial organisation
´ Neither a bank nor a payment system but amessage carrier
´ operates a network of communications allowing for transmission of financial messages
´ Used by banks, financial institutions´ for money transfers, for opening letters of credit,
netting operations etc
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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CHIPS (US)
´ Clearing House International Payment Systems
´ is a funds-transfer system
´ transmits and settles payment orders in U.S.
dollars
´ for some of the largest and most active banks inthe world.
´
On an average day, CHIPS transmits and settlesover 330,000 ´payment messagesµ worth anaggregate of $1.45 trillion.
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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PAYMENT PROCESS
´ Value date
´ Sending participant·s CHIPS identification number
´ Receiving participant·s CHIPS identification number
´
Dollar amount´ Intermediary bank identification
´ Beneficiary·s bank identification
´ Beneficiary identification
´
Originator identification´ Originator·s bank identification
´ Instructing bank identification
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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FEDWIRE
´ Earlier known as Federal Reserve Wire Network
´ Is Real Time Gross Settlement Funds Transfer
system´ operated by the Federal Reserve Bank
´ enables financial institutions to electronically
transfer funds between its more than 9,289participants (as of March 19, 2009)
´ Works in conjunction with CHIPS
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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CH APS (UK)
´ Clearing House Automated Payment System(CHAPS)
´ British Company
´ Established in London in 1984
´ Offers same-day Sterling fund transfers
´ Used to offer euro fund transfers
´ Service is now closed.
´ Now a part of TARGET
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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TARGET
´ Trans-European Automated Real-time GrossSettlement Express Transfer System
´ Central Bank·s large value payment system
´ Interbank payment system for the real-timeprocessing of cross-border transfers throughoutthe European Union
´ Provides backbone of financial system in Euro
´ Implementation tool for the Euro system's singlemonetary policy
´ Replaced by TARGET2 in 2007
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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TARGET2
´ TARGET2 is the RTGS system for the euro,
offered by the Eurosystem
´
Used for the settlement of central bankoperations, large-value euro interbank transfers
as well as other euro payments.
´ Single RTGS system platform
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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´ the Banca d·Italia, the Banque de France and
the Deutsche Bundesbank
« jointly provide the single technical infrastructure,
the Single Shared Platform (SSP) of TARGET2 and
operate it on behalf of the Eurosystem
5/12/2018 Int'l Funds Transfer Systems - slidepdf.com
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SEPA
´ Single Euro Payments Area (SEPA)
´ allows customers to make
´ non-cash euro payments to any beneficiary´ located anywhere in the euro area
´ using a single bank account and a single set of
payment instruments
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AIM OF SEPA
´ to advance European integration with a
competitive and innovative euro area retail
payments market that can bring with it
´ Higher service levels, more efficient products
and cheaper alternatives for making payments.
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SEPACONSISTS
´ the single currency,
´ a single set of euro payment instruments ² credittransfers, direct debits and card payments,
´ efficient processing infrastructures for europayments,
´ common technical standards,
´ common business practices,
´ a harmonised legal basis, and´ ongoing development of new customer-oriented
services.
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SEPA REQUIRES INTERACTION
BETWEEN
´ European banking industry
´ European clearing and settlement industry
´ Euro area companies´ Public administrations
´ customers
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´ All retail payments in euro will become
´domesticµ, and there will no longer be any
differentiation between national and cross-
border payments within the euro area.
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´ Nostro
« Accounts held by a domestic bank abroad
´
Vostro« Accounts held by foreign bank with a domestic
bank