brutoarveldussüsteem

Brutoarveldussüsteem is an Estonian term that translates to "gross settlement system" in English. It refers to a method of processing financial transactions where each transaction is settled individually and immediately. In a brutoarveldussüsteem, there is no netting or aggregation of payments. Instead, when a payment is initiated, funds are transferred directly from the payer's account to the payee's account. This process occurs for every single transaction, regardless of its size or frequency.

The primary characteristic of a brutoarveldussüsteem is its real-time nature. As soon as a transaction is authorized and cleared, the settlement is completed. This contrasts with net settlement systems, where multiple transactions are grouped together over a period, and only the net difference is settled at the end of that period. Brutoarveldussüsteem aims to reduce settlement risk by ensuring that each transaction is fully funded upon completion. This can lead to a more secure and transparent payment environment, as there is less exposure to counterparty risk. However, it can also be more resource-intensive, requiring significant liquidity to be available for each individual transaction. Examples of systems that might operate with brutoarveldussüsteem principles include some real-time gross settlement (RTGS) systems used by central banks for interbank payments.