Clearing (Ofer Abarbanel online library)

In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. This process turns the promise of payment (for example, in the form of a cheque or electronic payment request) into the actual movement of money from one account to another. Clearing houses were formed to facilitate such transactions among banks. Continue reading “Clearing (Ofer Abarbanel online library)”

Central counterparty clearing (Ofer Abarbanel online library)

Central counterparty clearing (CCP), also referred to as a central counterparty, is a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreign exchange, securities, options, and derivative contracts. CCPs are highly regulated institutions that specialize in managing counterparty credit risk. Continue reading “Central counterparty clearing (Ofer Abarbanel online library)”