How to Succeed in Fixing Settlement Fails

When failures-to-deliver in U.S. Treasury and agency securities spiked during the COVID-19 market volatility in March, it threw a spotlight on the need for settlement efficiency. Recent advances in machine learning have created an opportunity to help address these fails and promote market liquidity.

Capital markets have long suffered from a nagging problem: every day, roughly 2% of all U.S. Treasuries and mortgage-backed securities set to change hands between buyers and sellers do not end up with their new owners by the time they are supposed to arrive.