Multilateral netting

An arrangement among three or more parties to net their obligations.

The obligations covered by the arrangement may arise from financial contracts, transfers or both.

The multilateral netting of payment obligations normally takes place in the context of a multilateral net settlement system.

This system consolidates the cross-border payments of the various subsidiaries after conversion into a common, reference currency.

See also

• Bilateral netting
• Multilateral net settlement system
• Netting
• Payments and payment systems