New York Clearing House Association

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Net Settlement

    The resolution of all of a bank's transactions at the end of ...
  2. Interbank Market

    The financial system and trading of currencies among banks and ...
  3. Clearing

    The procedure by which an organization acts as an intermediary ...
  4. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  5. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  6. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
Related Articles
  1. Inside National Payment Systems
    Economics

    Inside National Payment Systems

  2. How The U.S. Government Formulates Monetary ...
    Personal Finance

    How The U.S. Government Formulates Monetary ...

  3. How The Federal Reserve Was Formed
    Personal Finance

    How The Federal Reserve Was Formed

  4. Examining Credit Crunches Around The ...
    Personal Finance

    Examining Credit Crunches Around The ...

comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
Trading Center