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Clearinghouse in sentence

34 examples of Clearinghouse in a sentence

We also want to be a clearinghouse for vendors of health-oriented tools, services, and programs.
A Hague-like international tribunal or clearinghouse might be established to appoint impartial panels to hear each case, but significant investment would be required.
America does need a clearinghouse for derivatives, and a much higher percentage of derivative trading should take place on exchanges, rather than bilaterally over the counter.
Notwithstanding these challenges, there is one significant step we can and should take immediately: the creation of an international clearinghouse dedicated to providing access to higher education.
To make these chances available to more young people, we need a clearinghouse linking refugees in need with universities and organizations in a position to help them.
John Sexton, President Emeritus of New York University, is dedicating himself to creating such a clearinghouse; and, under his guidance, the newly formed Catalyst Trust has provided seed funding.
Sampaio says that a clearinghouse could increase awareness and mitigate the risks faced by refugee students, with dramatic positive effects.
In addition to ensuring that conflict does not disrupt the education process, such a fund could provide ongoing support to the global clearinghouse – perhaps even providing financial aid to talented young people.
Even Amazon has gradually transformed itself from an Internet hypermarket to something closer to a clearinghouse that matches customer requests with near-customized products.
But national authorities were wary of potential illegal uses of such assets, reflected in the bitcoin-enabled, dark-web marketplace called Silk Road, a clearinghouse for, among other things, illicit drugs.
But a clearinghouse is no panacea, and its limits, although easy to miss, are far-reaching.
But, first, how does a clearinghouse work?
After the company needing currency-risk protection makes its euro-dollar trade with a bank, each of them turns its side of the trade over to the clearinghouse.
The resulting obligations between the company and bank become obligations to and from a middleman, the clearinghouse.
The clearinghouse protects itself by getting an up-front deposit from the bank (in case the bank fails in, say, 2015), and by monitoring the bank’s total “book” with the clearinghouse.
When the bank wins on a derivatives trade, the clearinghouse pays the bank; when the bank loses, it pays the clearinghouse.
When the bank has many trades on the clearinghouse’s books, the clearinghouse is fine if these trades net out to about zero; systemic risk, regulators insist, is thereby reduced, because the financial system needn’t worry about collecting the debts, one-by-one.
The clearinghouse also enhances transparency, because it can report its aggregate exposures to the regulator, who is better positioned to regulate a central clearinghouse than to regulate many opaque banks.
Unfortunately, the clearinghouse structure obscures them.
Most obviously, as many trades move from the banks to the clearinghouse, the clearinghouse itself will become a systemically vital institution.
Equally problematic is the fact that, while the clearinghouse and its participants can net wins and losses to reduce risk for those inside the clearinghouse, the clearinghouse does not assuredly eliminate the basic risk facing the entire financial system.
Often, it merely transfers that risk to creditors outside the clearinghouse.
The contract with AIG is a derivatives contract, which goes through the clearinghouse; but the contract with Citibank is another kind of contract, maybe just a regular loan, and does not go through the clearinghouse.
BofA also has a contract with, say, Bear Stearns through the clearinghouse for $100 million, with Bear Stearns on the losing end.
Without a clearinghouse, BofA has a $100 million asset (the $100 million that Bear owes it) and owes $200 million.
This is where the clearinghouse protects AIG, whose winning contract with BofA nets out against Bear’s losing contract with BofA.
The clearinghouse here eliminates counterparty risk for these three, but only by transferring the risk to Citibank, which, instead of losing $50 million, ends up losing the full $100 million.
In this stripped-down example, AIG, Bear Stearns, and BofA – as well as their attorneys, lobbyists, and supportive policymakers – promote the clearinghouse on the grounds that it reduces risk for its participants.
If that extra loss pushes a systemically vital Citibank over the precipice, the clearinghouse has not reduced systemic risk as advertised.
Whether the clearinghouse reduces systemic risk depends on the relative systemic importance of those inside and those outside the clearinghouse – AIG versus Citibank in this basic example – not on the clearinghouse’s capacity to reduce risk among its members.