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.

  1. Bilateral Credit Limit

    Intraday credit limits set by two institutions for use with one ...
  2. Clearing Broker

    A member of an exchange that acts as a liaison between an investor ...
  3. Out Trade

    A trade that cannot be cleared by the associated exchange clearing ...
  4. Interbank Market

    The financial system and trading of currencies among banks and ...
  5. Settlement Period

    The period of time between the settlement date and the transaction ...
  6. Interbank Deposits

    In an interbank deposit, one bank holds funds on behalf of another ...
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