New York Clearing House Association

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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. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  3. Clearing

    The procedure by which an organization acts as an intermediary ...
  4. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  5. Interbank Market

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  6. Federal Reserve System - FRS

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