Univ.-Prof. Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.English-language economic definitions generated from approved international institutional sources.
Chaining is a settlement arrangement in which the completion of one instruction helps make the assets or credit needed for another instruction available. By linking mutually dependent transactions, a payment or securities system may settle a larger set of queued instructions than would be possible if each instruction had to rely solely on resources already… read more »
Clearing is the post-trade process that prepares obligations for completion by verifying trades, calculating what each participant is responsible for, and reducing offsetting amounts where appropriate. In derivatives markets, it also involves routinely revaluing open contracts and updating the collateral or margin needed to support them before settlement occurs.
A clearing house is financial-market infrastructure that helps members determine what they owe one another after trades or payment instructions are submitted. It may offset or net those obligations, establish settlement amounts and timings, and manage the procedures and safeguards needed to complete them. Where it operates as a central counterparty, it interposes itself between… read more »
Clearing is the process of reconciling and determining the amounts that participants in a financial transaction must deliver or receive before those amounts are finally paid or transferred. It may involve aggregating transactions, offsetting reciprocal claims, and using an intermediary or other organised arrangement. Settlement is the later stage in which the resulting cash or… read more »
Under this basis, an entry is posted only once funds or other contractual consideration have actually changed hands. Authorising, arranging, or initiating the transaction does not by itself determine the reporting period.
Central bank money is the payment instrument created by a monetary authority and accepted as final settlement within the financial system. It includes cash in circulation and reserve balances that eligible financial institutions hold in accounts at the central bank. Unlike deposits issued by commercial banks, these instruments represent direct claims on the central bank… read more »
A bilateral net settlement system determines what each participating institution owes or is owed by another institution after offsetting their transactions over a specified period. Only the residual amount between the two institutions is then transferred, rather than the gross value of all underlying payments. Net obligations are determined independently for each pair of participants,… read more »
Bilateral netting is a contract-based process in which reciprocal payment duties between the same two participants are consolidated into a single balance. The participant with the larger total obligation pays the difference, while equal obligations cancel out. It may cover transactions under one or more agreements and is subject to applicable law.
A cap is a rule that restricts how large a participant’s permitted activity or outstanding position may become in a payment or settlement arrangement. It may govern exposure in either direction, including amounts owed to or receivable from the system, and is determined under the arrangement’s governance and measurement methods.