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Clearing house (finance) - Wikipedia

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A clearing house, often written as clearinghouse, is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions. The clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk of a member firm failing to honor its trade settlement obligations.[1] A clearing house provides emergency lending and assists banks when they need help.[2] After the legally binding agreement (i.e., execution) of a trade between a buyer and a seller, the role of the clearing house is to centralize and standardize all of the steps leading up to the payment (i.e., settlement) of the transaction. The purpose is to reduce the cost, settlement risk and operational risk of clearing and settling multiple transactions among multiple parties.[3] In addition to the above services, central counterparty clearing (CCP) takes on counterparty risk by stepping in between the original buyer

Clearing house (finance) - Wikipedia Jump to content From Wikipedia, the free encyclopedia Financial institution that provides clearing and settlement services A clearing house , often written as clearinghouse , is a financial institution formed to facilitate the exchange (i.e., clearance ) of payments, securities, or derivatives transactions. The clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk of a member firm failing to honor its trade settlement obligations. [ 1 ] A clearing house provides emergency lending and

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