Herstatt Bank Case
Chapter from the book:
Bağcı,
H.
(ed.)
2024.
Financial Manipulations with Case Studies.
Synopsis
The Herstatt Bank case, which transpired in 1974 in Germany, represents a pivotal banking crisis that exerted significant influence on the international financial system. The bank’s insolvency exposed the settlement risk (Herstatt risk) associated with time zone discrepancies in foreign exchange transactions. This event catalyzed substantial reforms in global banking regulation, including the formation of the Basel Committee and the development of mechanisms such as CLS Bank International. The collapse of Herstatt Bank underscored the vulnerability of the international banking system and the insufficiencies of the prevailing regulatory frameworks. This case serves as a critical juncture, highlighting the necessity of international cooperation to fortify global financial stability.
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Copyright (c) 2024 Haşim Bağcı; Çağatay Mirgen, Arzu Özmerdivanlı, Tolga Ergün, Hilal Ok Ergün, Ahmet Bayraktar, İstemi Çömlekçi, Ali Özer, Nevin Özer, Meltem Keskin, Ayşegül Şahin, Ayşegül Yıldırım Kutbay, Mediha Mine Çelikkol, Muhammed Yılmaz, Azize Kahramani Koç, Ceyda Yerdelen Kaygın