currency it bought, is sometimes called Herstatt risk. The failure of Herstatt Bank was a key factor that led to the worldwide implementation of real-time gross settlement (RTGS) systems, which ensure that payments between one bank and another are executed in real-time and are considered final. The work on these issues was coordinated by the Basel Committee on Banking Supervision under the Bank for International Settlements. The Continuous Linked Settlement (CLS) bank and system was launched almost 30 years later in 2002. This payment versus payment (PVP) process enables member banks to trade foreign currencies without assuming the settlement risk associated with the process, whereby a counterparty could fail before delivering their leg of the transaction. See also Long-Term Capital Management Bankruptcy of Lehman Brothers References Schenk, Catherine R. Summer in The City: The 1974 international banking crisis in London and its implications for regulatory reform. 2011. Defunct banks of Germany Companies based in Cologne Bank failures 1974 disestablishments in Germany