Clearing House Interbank Payment System – What is the Clearing House Interbank Payment System?

What is the Clearing House Interbank Payment System?

Definition of Clearing House Interbank Payment System: This Interbank payment system is referred as CHIPS. This can be explained as a privately owned funding transfer system that settles high payments among all the main and popular banks in the world. This cleaning house makes about 96% of the payments that are denominated by the dollar which moves between different countries in the world. This includes foreign exchange rates and payments which are trade related. This clearing house is managed by the Clearing Interbank Payment Company in New York. It has been established since 2001 and is been regarded as a real clearance and settlement system. This clearing house works with the Fedwire Service, managed by the Reserve Bank. The CHIPS forms the main network for the international as well as domestic payments in U.S. The banks which deal with U.S dollars take part in the Interbank payment system. Nearly, 70% among them are not U.S banks.