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A comment on It’s Time for Real Time Settlement. Parent comment

Re:It’s Time for Real Time Settlement by im3w1l on Tuesday February 02, 2021 @05:09PM (#26007579)
> When you expand it to institutions, real-time settlement means having to warehouse all the funds they might need to trade with in a day with their prime brokers as cash. Not Treasuries. Cash. Because their broker has to be able to wire out that $1bn instantly.

I see two solutions here, either they sell the treasures (with also instant settlement) and then buy, or they could trade on margin backed by the securities. Or am I missing something?

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Re:It’s Time for Real Time Settlement by JumpCrisscross on Tuesday February 02, 2021 @05:22PM (#26007768)
> either they sell the treasures (with also instant settlement) and then buy, or they could trade on margin backed by the securities.

Treasuries don't instantly settle or clear. They clear next day. We could discuss changing that, but it's about nine hundred times more complicated than overhauling the entire stock market.

> or they could trade on margin backed by the securities

This shifts the entire market's credit risk to the banks. Which banks love. (Getting away from that is why we built clearinghouses.)

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