text: network. Ifmorethanonepaper-based orelectronic network existsina country, theintra-day creditcapcouldbeapplied tothenetamount owed byanyone bankacrossallnetworks. Theperiodoftimefromthesending ofthefirstfundstransfer instruction through thenetwork untilsettlement canbereduced toa minimum so as tolimitthepossibility thateventspriortosettlement willcauseafailure tosettle. Bankscanrefusetomakefundsavailable totheircreditpartyuntil settlement hasbeencompleted. Thisprotects thereceiving bankincase offailure ofsettlement atthecostofdelaying availability offundsto thecreditparty. sincethecreditpartymayneedthosefundsinorderto makeitsownfundstransfers thatday,as may be particularly thecase wherethecreditpartyisitselfabank,theentirenetwork may come toa haltbecause ofashortage offundsuntilthosefundsaremadeavailable subsequent tosettlement. Alternatively, receiving banksmay make the fundsavailable tothecreditpartywitharighttoreverse thecreditin caseoffailure ofsettlement. Thisprotects thereceiving banktothe extentthecreditpartyiscredit-worthy byshifting theriskoflossfrom thereceiving banktothecreditparty. Thedebitbalance ofeachparticipating bankcanbeguaranteed by an appropriate financial institution, whichmightbethecentral bankora private orpublicinsurance fund.Protection ofthesystemismost effectiveiftheguaranteeing financialinst!tutioncanmakethenecessary fundsavailable immediately. Otherwisethesystemwillsufferacash-·flow shortage thatmaycauseotherbankstobeunabletomeettheircommitments. B.National experience 7.Inthissection aresetforththeexperience ofthreecountries whichhave takendifferent approaches to1imifing systemriskintheirhigh-value electronic fundstransfer networks.A/CN.9/266/Add.1 English Page30 1.France 8.On16October 1984 ahigh-value computer-to-computer networkentitled Systeme automatique degeslion integrae parteletransmission detransactions avecimputation dereglements "Etranger" (SAGITTAIRE) beganoperations. Since SAGITTAIRE wasoriginally conceived as adomestic extension ofS.W.I.F.T .• onlybankswhicharemembers orusersofS.W.I.F.T. canparticipate in SAGITTAIRE. However. theuseofSAGITTAIRE hasbeenextended sothatitcan furnish thedomestic linkforessentially everytypeofinternational funds transfer labeled inFrenchfrancs. Itisnotcurrently available forusefor purelydomestic fundstransfers. although ithasbeendecided thatitwillbe available forpayments arising outofmoneymarkettransactions.• 9.Although SAGGITAIRE functions asthoughitwas acorrespondent bank service oftheBankofFrance. theBankservesonlyastheoperating agentfor thegroupofparticipating banks. Participating bankssendSAGITTAII! funds transfer instructions totheBankofFrancewithoneofthreeentrydates. i.e.thatday.thenextbanking dayortwobanking dayslater. Thesending bank's"pseUdo-account" isimmediately debited according totheappropriate entrydate.thereceiving bank's"pseUdo-account" ilcredited according tothe appropriate entrydate,andthefundstransfer instruction isforwarded tothe receiving bank. 10.Theentrydateclosesat12:00oneachfullbanking day(10:00onpartial banking days).i.e.anentrydateofWednesday. 4Marchrunsfrom12:00 Tuesday. 3Marchto12:00Wednesday. 4March.• 11.Attheendofthebanking day.i.e.at17:30onfullbanking days.the debitsandcredits arising outofSAGITTAIRE operations showing inthe "pseudo-account" forthatentrydateareentered totheaccount ofeach participating bankwiththeBankofFrance. alongwiththedebitsandcredits totheaccount ofthebankarising outofotherbanking operations. However. sincetheBankofFrancedoesnotallowa banktocarryadebitbalance inits account. theentries arenotmadeifdoingso would leaveadebitbalance in theac.count ofabank.Ifthedebitbalance isnotcovered by11:30thenext morning. theBankofFranceisauthorized toannulthedebitentries arising • outofSAGITTAIIE transactions. aswellasthecorresponding credits. inthe reverse orderofreception oftheinstructions untilthedebitbalance is eliminated. 12.Asaresult.iftherewas any reasontodoubtthefinancial position ofa sending bank.themostdangerous fundstransfer instructions fromthe viewpoint ofthereceiving bank would be thosewhichpassthrough SAGITTAIR! immediately before12:00.whilethemostsecurewould be thosemadewitha delayed entrydateorwhichpassimmediately after12:00. However. sinceall participating banksareunderpubliccontrol. failure tosettleishighly unlikely. TheSAGITTAIRE rulesdonotspecify whenthereceiving bankmust
analysis: The text appears to be discussing the mechanisms and rules of a high-value electronic funds transfer network, specifically the SAGITTAIRE system in France. It touches on topics such as intra-day credit caps, settlement processes, and the guaranteeing of debit balances. The language used is technical and focused on the financial and banking aspects of the system.