clearing house
Plural
clearing houses
1
a financial institution that oversees exchanging cheques and other financial transactions
- The clearing house acts as an intermediary between buyers and sellers in financial markets, facilitating the settlement of transactions.
- After trading stocks, brokers submit their orders to the clearing house for reconciliation and settlement.
- The international clearing house handles transactions between banks from different countries, ensuring smooth and efficient cross-border payments.
- In the derivatives market, the clearing house plays a crucial role in mitigating counterparty risk by guaranteeing the performance of trades.
- The clearing house conducts daily settlements to ensure that trades are settled promptly and accurately, reducing systemic risk in the financial system.