Bruttomaksutavassa

Bruttomaksutavassa, often translated as "gross payment method" or "gross settlement," refers to a system where financial transactions are settled individually and on a gross basis, meaning each transaction is cleared and settled separately without netting against other transactions. This approach contrasts with net settlement systems, where multiple transactions between parties are aggregated, and only the net difference is settled.

In a bruttomaksutavassa system, when a payment is initiated, the full amount of the transaction is transferred from the payer's account to the payee's account. There is no aggregation or offsetting of payments. This method ensures that each transaction is completed in its entirety before the next one is processed.

The primary advantage of bruttomaksutavassa is its certainty. Once a transaction is settled, it is final and irrevocable, reducing settlement risk. This is particularly important in high-value or time-sensitive transactions where immediate and complete settlement is crucial. However, this method can be less efficient in terms of liquidity management. As each transaction requires the full amount of funds to be available, it can lead to higher overall liquidity needs for financial institutions compared to net settlement systems.

Bruttomaksutavassa is often employed in large-value payment systems, such as real-time gross settlement (RTGS) systems, which are designed to handle significant financial flows, including interbank payments and securities settlements. Examples of RTGS systems include TARGET2 in the Eurozone and Fedwire in the United States. The use of such systems is a key component of financial stability, as it minimizes the risk of contagion in the event of a participant's default.