---
term: "Netting"
category: "Settlement and reconciliation"
url: https://federatedbanking.com/glossary/netting
source: Federated Banking™ glossary
---

# Netting

> Offsetting what participants owe each other so only the net amounts move.

Netting reduces many obligations to a few. If participants owe each other four hundred and twenty thousand pounds in total, offsetting those obligations may leave only a much smaller net amount to move. Fewer, smaller movements mean lower cost and less risk, and each participant ends with one clear final position.

Related terms: [Settlement](https://federatedbanking.com/glossary/settlement.md), [Gross and net](https://federatedbanking.com/glossary/gross-and-net.md)