DEFINITION of 'New York Clearing House Association '

An organization established in 1853 to simplify the settlement of interbank transactions. Modeled after the London Clearing House, which was established in 1773, the New York Clearing House Association was the first in the United States. Before the Federal Reserve System was established in 1913, the New York Clearing House Association also worked to stabilize the monetary system.

BREAKING DOWN 'New York Clearing House Association '

Prior to 1853, banks sent porters daily to exchange their checks for coin, and settlement occurred only once a week. That system encouraged errors and abuses. Today, approximately $20 billion in transactions are handled, largely electronically, each day.

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