in banking, the periodic settling of bankers' claims against each other, for which local banks establish clearinghouse associations. Clearinghouses are said to have existed in Florence by A.D. 800. They were certainly perfected in Lyons by 1463, and their use was widespread in 18th-century Europe. The first modern clearinghouse was either at Edinburgh (1760) or at London (1773). Such an institution involves frequent meetings of local bank representatives to settle the balances among member banks. In the United States, the balance (debit or credit) for each bank at the close of a meeting is forwarded to the Federal Reserve bank, which adjusts the individual accounts accordingly. Intercity balances are settled on the books of the Federal Reserve banks daily by electronic transfers. Clearing is also practiced by stock and commodity exchanges. The Stock Clearing Corp. (started in 1920), for instance, is responsible for clearing transactions made at the New York Stock Exchange (NYSE); in addition, the National Securities Clearing Corp. (1976) handles clearances for NYSE, the American Stock Exchange, and NASDAQ (see under stock exchange), and the International Securities Clearing Corp. (1985) handles overseas transactions. Many of these operations are now computerized. International claims are settled by clearing unions, groups of central banks, and other major financial institutions. The most famous such group was the European Payments Union, now defunct, which was created in 1950 to provide economic stability in Europe during the postwar period.
US banker. An authority on the world monetary system, he was president and chief executive officer of the Federal Reserve Bank of New York, the large
in the United States, financial institution of a class authorized by Congress in acts of 1863 and 1864. The acts were intended to provide a way of m
The Federal Reserve System, known simply as the Fed, is the central bank of the United States and conducts the nation's monetary policy. It also reg