Through this role, the system managed by the CBU reaches all the transactions of financial system agents who settle in Central Bank’s money, that is, the cash settlement of operations in the settlement accounts that each of the participants hold with the CBU.
The most important feature of this system is that it ensures that operation settlements occur immediately and irrevocably, thus mitigating systemic risk 1.
To do this, Uruguay uses a Real-time Gross Settlement System (currently AGATA, in process of implementation RTX/S), which is a transfer system where fund settlement instructions are given individually (instruction per instruction).
The operations settled are:
• Interbank Fund Transfers.
• Purchase or sale of foreign currency.
• The results of Clearing House operations (checks, ATMs)
• Fund transfers incurred in securities transactions.
• CBU’s monetary operations, that is, those which regulate the amount of money in the economy and which facilitate the liquidity among RTGS participants.
1 The risk that one participant's inability to meet its obligations when due will cause other participants or other financial institutions to be unable to meet their obligations when due. Such a failure may cause significant liquidity or credit problems and, as a result, might threaten the stability or confidence in markets.
“Recommendations for securities settlement systems”, CPSS-IOSCO, November 2001.
