Clearing House Interbank Payments System - CHIPS

Clearing House Interbank Payments System - CHIPS
The primary clearing house in the U.S. for large banking transactions. CHIPS settles over 250,000 of trades per day, valued in excess of $1 trillion. CHIPS and the Fedwire funds service used by the Federal Reserve Bank combine to constitute the primary network in the U.S. for both domestic and foreign large transactions denominated in U.S. dollars.

CHIPS differs from the Fedwire transaction service in several respects. First and foremost, it is cheaper than the Fedwire service, albeit not as fast, and the dollar amounts required to use this service are lower. It is also privately owned by member banks and has only 46 members (as of 2006), compared to the approximately 50,000 members that use the Fedwire service. Finally, CHIPS acts as a netting engine, where payments between parties are netted against each other instead of the full dollar value of both trades being sent.


Investment dictionary. . 2012.

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  • Clearing House Interbank Payments System — The Clearing House Interbank Payments System (CHIPS) is the main privately held clearing house for large value transactions in the United States, settling well over US$1 trillion a day in around 250,000 interbank payments. Together with the… …   Wikipedia

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  • CHIPS —   An ISO term. (Clearing House Interbank Payments System) A private telecommunications payment service operated by the New York Clearing House Association for banks in the New York area, which handles US dollar payments only …   International financial encyclopaedia

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