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In trading, clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction. It involves the management of post-trading, pre-settlement credit exposures to ensure that trades are settled in accordance with market rules, even if a buyer or seller should become insolvent prior to settlement.
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.
A clearing house 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 ...
An automated clearing house (ACH) is a computer-based electronic network for processing transactions, [1] usually domestic low value payments, between participating financial institutions. It may support both credit transfers and direct debits .
A market-clearing price is the price of a good or service at which the quantity supplied equals the quantity demanded, also called the equilibrium price. [2] The theory claims that markets tend to move toward this price. Supply is fixed for a one-time sale of goods, so the market-clearing price is simply the maximum price at which all items can ...
In the United States, the ACH Network is the national automated clearing house (ACH) for electronic funds transfers established in the 1960s and 1970s. It is a financial utility owned by US banks, and is one of the largest payments networks in the United States, both by volume and by customer reach; virtually every bank account in the US, whether personal or commercial, is connected to the ...
A clear title, also known as a “clean title,” is a property title that is free from liens or additional issues that could jeopardize ownership, such as boundary disputes (encroachments) or ...
Credit clearing is the practice according to which a small group of banks need to make many payments to each other, of adding up the payments and cancelling them out before settling the remainder. While clearing is about waiting for the payment to go through, credit clearing is about cancelling out a payment with one coming in the opposite ...