What are Clearinghouse Funds?

Places to centrally handle the exchange and settlement of funds receivable and bills receivable between banks in the same city or region

Clearing house

zhèn quàn jio yì su

Institutions that buy and sell securities such as public debt, corporate bonds, and stocks. It does not participate in the transaction itself, but provides a place for the seller and the buyer to trade. The actual transaction is handled by the broker and the dealer. The earliest was the Amsterdam Stock Exchange, which was established in 1613. The earliest in China was the "Shanghai Zhongye Public Office" established in 1905. After the founding of the PRC, securities trading was cancelled for a time. From 1990 to 1991, Shanghai and Shenzhen successively established stock exchanges.

Places to centrally handle the exchange of bills receivable and payable between banks in the same city or the same area and the settlement of funds. It was initially set up by a mutual agreement among banks. With the establishment and development of the central bank system, it has now become a bill clearing agency under the leadership of the central bank. The earliest clearing house in the world was established in 1773 in London, the UK with the most developed bills at that time. New York was founded in 1853, Paris in 1872, Osaka in 1878, and Berlin in 1887. China's earliest clearing house appeared in Shanghai. At the end of the Qing Dynasty, the old-style money houses in Shanghai were quite prosperous. The bills collected between the money houses were very inconvenient because they had to send someone to carry the remittance account book to the other people's money house. In 1890, the Shanghai Money Industry Association established the Exchange Association, which used public documents instead, and settled the difference through the public documents exchange and transfer settlement. This is an early form of bill exchange in China, and it also functions as a bill clearing center. In the early days of the Republic of China, China Merchants Bank gradually increased its number of establishments, but it did not have its own clearing institution. Its inter-bank bill receipts and payments were entrusted to banks through the General Meeting of Exchanges and Exchanges. After that, Shanghai's banking business became increasingly developed, and the circulation of bills gradually increased. The liquidation through the bank not only caused unscheduled funds dispatch, but also bears risks, in case the bankruptcy would inevitably be affected. To this end, the Shanghai Banking Union entrusted the Banking Joint Preparatory Committee to set up its own clearing institution for the Shanghai banking industry in accordance with the precedent of the American Clearing House. During this time, it overcomes all the obstacles and objections of the bank and foreign banks at that time. Finally, January 10, 1933 Japan, the first new type of clearing house in China.

Initially, the clearing house only gathered the banks involved in clearing the bills, and they handled the clearing and settlement of receivables and receivables separately. In this way, each bank must exchange notes with other banks one by one. However, it was later discovered that the receivables of any bank must be receivables of other banks; the receivables of any bank must also be receivables of other banks. The sum of receivables of each bank must be equal to the sum of payables of each bank. Therefore, each bank does not need to settle the balance with each other, but performs multilateral net settlement. All participating banks can pay or receive their bank's payables or net receivables separately, so all banks need only Pay or earn once.

Take [Table 1] as an example:

In the table, we can see that although the banks of A, B, D and D have receivables and receivables with each other, after multilateral net settlement, in the end, only the banks have to pay to each of 10 units of Bank A and Bank C, for a total of 350. The settlement of each unit is all settled. According to this principle, the bill exchange has the following steps:

1. Before entering the market, each bank first classifies the bills receivable according to the payment bank, calculates the amount of receivables and summary amounts receivable from each payment bank, and fills in the bill exchange settlement table.

2. After entering the market, on the one hand, each bank will send the bills receivable to the relevant payment banks, on the other hand, it will receive the bank's payable bills from other banks, check, calculate the amount payable to each bank and the total amount payable, and fill in the exchange. Bill calculation table.

3. According to the exchange bill calculation table, each bank compares the total receivables and payables of the Bank, calculates the net receivables and payables, fills out the exchange balance report form, and uses the report form to make the final payment with the clearing house of the clearing house. Pay.

The balance of payment can be completed by transferring funds between the deposit accounts of the central bank.