(12)Settlement fails due to a lack of cash should be subject to a single penalty rate for all transactions given that such a situation is independent from the asset type and liquidity of the financial instrument concerned or the type of transaction. In order to ensure a deterrent effect and incentivise timely settlement by failing participants through cash borrowing, it is appropriate to use the costs of borrowing cash as a basis for the penalty rate. The most appropriate penalty rate should be the official interest rate of the central bank issuing the settlement currency that should evidence the borrowing costs for that currency.