... to receive funds the moment the instruction to pay is issued while the funds followed usually at the end of the day. Some of these payments (especially in the forex market) were larger than a bank's whole capital. But CHAPS has a problem to with risk, receiver risk arises. This arises when a system member provides funds to its customers, having received a payment instruction from another member but before final settlement. The receiving bank that has offered irrevocable funds to its customers is exposed to the sending bank until final settlement occurs at the end of the day. Those customers receiving funds before settlement may then initiate further transfers, creating additional obligations for their settlement banks. This may be repeated several times during a day, building up large exposures. If one the settlement banks were to fail before final settlement the other members would be deprived of the money ...

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