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Netting

• Reducing transfers of funds between subsidiaries or separate companies to a net amount.

• Is a process used by institutions and clearinghouses to determine the marginal risks and demands for funds.

 
 

Follow this link for all the terms related to net.

 
 Embedded terms in definition
 Marginal
Subsidiaries
 
 Referenced Terms
 Mortgage backed securities clearing corporation: A wholly owned subsidiary of the Midwest Stock Exchange that operates a clearing service for the comparison, Netting, and margining of agency-guaranteed MBSs transacted for forward delivery.

 Payments netting: Reducing fund transfers between affiliates to only a netted amount. Netting can be done on a bilateral basis (between pairs of affiliates), or on a multi-lateral basis (taking all affiliates together).

 Reinvoicing center: A central financial subsidiary used by an MNC to reduce transaction exposure by having all home country exports billed in the home currency and then reinvoiced to each operating affililate in that affiliate's local currency. It can also be used as a Netting center.

 
 Related Terms
 Exposure netting
Intracompany netting technique
Netting out
Payments netting

<< Net worth Netting out >>

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