Real-time gross settlement — each payment settled individually, immediately, and finally.
In a real-time gross settlement system each payment is settled individually and immediately in central bank money, rather than being netted with others and settled in a batch. Settlement is final on execution.
The trade-off is liquidity against risk. Gross settlement eliminates the exposure that builds up between netting cycles and requires participants to hold far more liquidity, because every payment must be funded as it goes rather than offset.
The large-value systems most economies depend on work this way — TARGET2 in the euro area, CHAPS in the United Kingdom, Fedwire in the United States. Each publishes its own operating calendar, and those calendars are not held here.
RTGS settles each payment gross and immediately. Net settlement offsets obligations and settles the difference later, cheaper in liquidity and riskier in between.
See also net settlement · clearing · settlement finality · value date
We hold no settlement or clearing calendars. This entry defines the term and demonstrates nothing, because a near-miss borrowed from exchange closures would imply coverage that does not exist. See what we hold.