Bilateral netting sometimes seen in news, it refers to

Solution

• A bilateral netting agreement enables two counterparties in a financial contract to offset claims against each other to determine a single net payment obligation that is due from one counterparty to the other, meaning that the payables and receivables are netted off. Such a provision would allow companies, especially banks, to set aside far lesser capital based on their net positions rather than gross settlements, where the entire amount due must be covered.