The exposure -- or amount at risk -- in a foreign exchange trade lasts from the time a payment instruction for the currency sold can no longer be cancelled unilaterally by a bank until the time the currency purchased is received with finality. And it equals the full amount of the currency purchased.
Although foreign exchange settlement risk first became a major concern with the failure of Bankhaus Herstatt in 1974, only in the past few years has a serious attack been made on the problem. The ball was set rolling by the New York Foreign Exchange Committee and the Committee on Payment and Settlement Systems of the Group of Ten Countries.