Herstatt 1974
Bankhaus Herstatt failed in 1974 between the two legs of FX settlement, creating Herstatt risk — the reason we have CLS and why FX is a payments-system problem.
Definition
Herstatt 1974 refers to the reason we have CLS and why FX is a payments-system problem. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
It is a named object desks use to frame risk, positioning, or process. When the reason we have CLS and why FX is a payments-system problem shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what herstatt 1974 is saying. If the reason we have CLS and why FX is a payments-system problem moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
Keep the definition fixed, then challenge it with cross-checks before sizing. Prefer a short written null hypothesis for Herstatt 1974: what would falsify the current reading in the next window?
Ask the macro AI about this object
Opens Copilot with Codex + RAG context, or send the object into Alpha Factory intake.