Shorter cycles, higher stakes: T+1 may be the biggest test yet for European banks

Europe’s move to a T+1 settlement cycle will fundamentally reshape how banks operate in capital markets, compressing trade lifecycles and eliminating the overnight buffer firms once relied on to reduce fail rates and penalties. Under compressed settlement timelines, straight-through processing (STP) will be critical, to accelerate affirmation and reporting, and give banks a viable path to faster settlement.