Clearing House

A clearing house sounds like a place that clears things. And indeed it does, but not literally as in making chairs spotless, but rather with regard to financial work.

Essentially in the banking sector a clearing house is a place authorised and legally able to exchange cheques and other payment types, which includes electronic transfers.

It logs all the transactions that are processed and settles all the obligations, undertaking the relevant transfers of funds.

Related Articles

Frozen account
Electronic banking
Capital adequacy
Foreign exchange
Loan Shark

More Financial Words and Vocabulary Explained