clearing

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Clearing is in the economy , a collective term for different Saldierungs - and netting procedure between economic agents .

General

The word Clearing is the gerund "clean, clear" for ( English to clear ). It first appeared in connection with the London Clearing Houses ( English Clearing Houses ) on. These were banks that only regulated the excess balances from cashed checks and bills of exchange through accounting systems . They rented a building on Lombard Street in 1770 , and the Bankers' Clearing House was not established as an organization until 1775, and by 1810 already had 46 members. The clearing trade reached a greater extent through the accession of the great public banks in 1854 and the Bank of England (1864); the transactions effected appeared in a clearing Book ( English clearing book ). The first US clearing house was established in 1854 as the New York Clearing House Association , followed by one in Boston in 1856. Karl Marx , who lived in London, was also familiar with the clearing house: "The mere economization of the means of circulation appears to be most developed in the clearing house, the mere exchange of due bills and the predominant function of money as a means of payment to offset mere surpluses".

The payment transaction regulations agreed in international treaties (“clearing agreements”) formed the basis for Swiss economic relations with the Axis powers in both the pre-war and war years . Even if the agreements were officially called clearing agreements, these were compensation transactions because around 20% of the volume had to be paid for in foreign currency .

Clearing systems

Global interbank trade is characterized by large-volume banking transactions in money , foreign exchange , securities and derivatives trading . These transactions consist of mutual delivery and payment step by step on the day of fulfillment . There are clearing systems in place to reduce the number of these transactions , but also to eliminate financial risks . The clearing system is a medium for the legally binding transfer of means of payment or securities between economic entities with simultaneous offsetting of claims and liabilities between contracting parties .

species

Clearing procedures exist wherever mass payment transactions take place. This is particularly the case within corporations and in banking .

Group clearing

In the group, non-banks use group clearing (industrial clearing) to offset intra-group receivables and liabilities between the parent company ( holding company ) and subsidiaries in order to reduce payment flows and transaction costs . For this purpose, accounting systems are created ("in-house banking"), which ensure the group-wide balance of short-term liquidity through centralized cash management . The parent company acts as a clearinghouse , via a central account ( English cash concentration account, master account ) working day offset receivables and liabilities within the Group. The purpose of the Group clearing is to minimize the Group dregs of liquidity. The general money market is only used when all of the Group's internal compensation options have been exhausted .

While group clearing aims to minimize intra-group transactions, cash pooling mostly serves to balance out intra-group liquidity.

Banking

In English, the European Central Bank understands the term clearing to be the determination of mutual claims, liabilities and delivery obligations . The Bank for International Settlements (BIS) understands clearing - also in English - to mean the transmission, reconciliation and, in some cases, the confirmation of transactions as well as other information required for processing or for settlement (e.g. payment method, place and time delivery), and possibly the settlement itself. Optionally, a set-off and netting ( netting takes place of business). Clearing is often taken over by a clearing house and is intended to ensure subsequent error-free processing and transfer of ownership.

species

A distinction must be made in banking between clearing in payment transactions , in futures exchanges , in securities business and especially for credit default swaps .

  • In payment transactions , clearing is understood to mean the transmission, reconciliation and, in some cases, the confirmation of payment orders before payment settlement, which in Germany corresponds to payment transaction processing . If incoming and outgoing payments are offset against each other within the credit institute and only the net items are settled, this is also referred to as billing , balancing or discounting .
  • Derivatives exchanges : Clearing in connection with a futures exchange is understood to mean the settlement, collateralization and monetary and piece-wise regulation of all transactions concluded on the futures exchange . Trading on futures exchanges is primarily characterized by the clearing and settlement system that is institutionalized by the clearing house. The buyers and sellers of the contracts are no longer contractual partners because the futures exchange clearing house acts between the two and each becomes their contractual partner ( counterparty ).
  • Securities settlement systems rely on clearing houses acting as central counterparty , which act between buyer and seller and thus relieve both contracting parties of the settlement risk (settlement risk ). The Securities store (mostly as stock right ) at a central securities depository , the clearing house of the transfers takes with regard to the delivery of shares.
    • In the case of net clearing , the amounts resulting from the transactions carried out in favor of or to the detriment of each participant are credited or debited to the account held at the clearing house for the respective participant. Similar to a current account, receivables and liabilities are netted so that only these differences are periodically processed and settled.
    • In the case of gross clearing, on the other hand, such netting does not take place; instead, each transaction is settled individually.
As a rule, no physical movement of securities takes place in either of the two processes. In Germany, for example, the papers are usually kept centrally at Clearstream Banking AG and are only transferred electronically.

In cashless payments acting Central Bank in foreign currency , the CLS Bank and securities, a CSD as a clearing house. Clearstream is one of the world's largest securities clearing companies and acts as a central securities depository. We should also mention Euro Clear , but does not assume the actual clearing. The clearing of transactions on the NYSE is carried out by the National Securities Clearing Corporation .

Clearing levels

There are three clearing levels:

Only multilateral clearing is suitable for eliminating payment , foreign currency , credit or liquidity risks between the contracting parties involved.

Clearing banks

Clearing banks ( English Clearing Banks ) are British banks that belong to the Bankers' Clearing House and whose name can be traced back to the offsetting process for checks that takes place between them.

Regulatory treatment

The Capital Adequacy Ordinance (CRR) deals in great detail with clearing under banking supervisory law. Her only concern is that transactions are protected against the bankruptcy of participating banks , counterparties or central counterparties. According to Art. 300 CRR, “insolvency-protected” in relation to customer assets means “that effective agreements exist that prevent the creditors of this central counterparty or clearing member from accessing those assets in the event of the insolvency of a central counterparty or clearing member, or that Clearing broker can access the assets to cover losses suffered as a result of the default of one or more clients other than those who contributed those assets ”. A credit institution that acts as a clearing member may multiply its exposure amount in the event of default (EAD) in accordance with Art. 304 (4) CRR by a lower scalar when assessing the capital requirements for its risk positions vis-à-vis a customer.

According to Regulation (EU) No. 648/2012, clearing via a central counterparty serves specifically to eliminate the risk of counterparty default and defines clearing in Art. 2 No. 3 as the “process of creating positions, including the calculation of net liabilities, and guarantee that financial instruments , cash or both are available to hedge the risk arising from these positions ”. According to Art. 2 No. 14 of this ordinance, the clearing member is “a company that participates in a central counterparty and is liable for the fulfillment of the financial obligations arising from this participation”. Central counterparty (CCP) is, according to Art. 2 No. 1, a legal person that acts between the counterparties of the contracts traded on one or more markets and thus acts as a buyer for each seller or as a seller for each buyer. Clearing through a CCP is specifically designed to eliminate counterparty default risk and may therefore not be the best solution for dealing with settlement risk.

In March 2015, the ECJ ruled that clearing houses do not necessarily have to be based in the euro area in order to process securities in euros . The ECB does not have the necessary authority to regulate the operation of securities clearing systems including CCPs and is therefore not allowed to prescribe the settlement of securities transactions in euros only in the euro area.

Barter clearing

The buyer or suffers importer under monetary or foreign exchange shortage , helping the barter clearing (or English bartering ). Here, goods or services are always not offset bilaterally, but multilaterally via a cash-free accounting system between commercial and / or private participants.

economic aspects

Banks no longer have to deal with the counterparty default risk of a large number of financial services institutions, credit institutions or investment firms , but only with a few clearing houses. Their counterparty default risk is either very low (some central banks are incapable of insolvency such as the Deutsche Bundesbank ; or clearing houses with pure payment processing such as the CLS-Bank ) or standard banking (such as The Clearing Corporation ). This reduces the risk of counterparty default, which increases the security of market participants . If a clearing member defaults due to insolvency, this can have a domino effect among market participants and ultimately endanger the stability of the financial market .

Demarcation

Clearing comprises the procedural sequence of a settlement, while netting describes the legal effect of the settlement process. This means that every netting in payment transactions is also a clearing, while conversely not every clearing procedure also has to be brought about by a netting process.

See also

literature

  • Bank of International Settlement (BIS): Clearing, settlement and depository issues . (PDF file; 175 kB)
  • Michael Güntzer: Clearing Problems. Wißner, Augsburg 1998, ISBN 3-89639-140-2 ( Augsburger Mathematisch-Naturwissenschaftliche Schriften 26), (At the same time: Augsburg, Univ., Diss., 1998).
  • David Loader: Clearing, Settlement and Custody. Butterworth Heinemann, Oxford et al. 2002, ISBN 0-7506-5484-8 ( Operations Management Series ).
  • Rüdiger Parsche, Matthias Steinherr, Sandra Waller: Country of origin principle and clearing for VAT - a macroeconomic approach. Ifo Institute for Economic Research, Munich 1996, ISBN 3-88512-289-8 ( Ifo studies on financial policy 61).
  • Hans-Wilhelm Ruland: Effects. Business and technology. 3rd revised edition. Schäffer-Poeschel, Stuttgart 2004, ISBN 3-7910-2249-0 .
  • Peter von Hall: Insolvency offsetting in bilateral clearing systems - The termination and offsetting of transactions with postponed fulfillment times according to German and international insolvency law, taking into account the introduction of central contracting parties on stock exchanges. Nomos, Baden-Baden 2011, ISBN 978-3-8329-6428-3 .

Individual evidence

  1. ^ JJ Pfau: Banking in Switzerland and abroad . 1875, p. 27 ( limited preview in Google Book search).
  2. ↑ Hanns Belohlawek: Handbook of banking and stock markets . Books on Demand, 2011, ISBN 978-3-86383-054-0 , pp. 39 f . ( limited preview in Google Book search).
  3. ↑ Georg Obst: The banking business . tape 2 , 1923, pp. 137 ( limited preview in Google Book search).
  4. ^ Karl Marx: The capital. Volume I . 1867, p. 363.
  5. ^ Stefan Frech, Clearing. Payment transactions between Switzerland and the Axis powers. In: Independent Expert Commission Switzerland. Volume 3, 2001, p. 2 ff.
  6. ↑ Jürgen Krumnow, Ludwig Gramlich, Thomas A. Lange, Thomas M. Dewner (eds.): Gabler Bank-Lexikon. Bank - Stock Exchange - Financing . Springer, 2002, ISBN 978-3-663-07651-3 , pp. 279 ( limited preview in Google Book search).
  7. ^ Rudolf Kreis: Business Administration . tape 3 : Finance and Accounting. Walter de Gruyter, 1998, ISBN 978-3-486-79514-1 , p. 326 ( limited preview in Google Book search).
  8. ↑ Klaus Peter Berger: The offsetting contract . 1996, ISBN 3-16-146605-5 , pp. 43 ( limited preview in Google Book search).
  9. ↑ Guido Eilenberger: Lexicon of financial innovations . 1996, ISBN 978-3-486-78712-2 , pp. 251 ( limited preview in Google Book search).
  10. ^ Clearing. Archived from the original on April 27, 2009 ; accessed on August 7, 2018 .
  11. ↑ Francis Braeckevelt: clearing, settlement and depository issues. (PDF; 179 kB) In: BIS Papers No 30. Retrieved on August 7, 2018 (English).
  12. ^ Gabler Wirtschaftslexikon . tape 1 . Springer Fachmedien, Wiesbaden 2004, ISBN 978-3-663-01439-3 , p. 594 f . ( limited preview in Google Book search).
  13. ↑ Wolfgang Grill, Ludwig Gramlich, Roland Eller (Eds.): Gabler Bank Lexicon. Bank, stock exchange, finance . tape 1 , 1996, ISBN 978-3-322-82939-9 , pp. 429 ( limited preview in Google Book search).
  14. ↑ Finextra of 16 December 2009, CME Group launches CDS clearing
  15. ↑ 250 keywords banking industry. Basic knowledge for specialists and managers . Springer Fachmedien, Wiesbaden 2016, ISBN 978-3-658-10777-2 , p. 42 ( limited preview in Google Book search).
  16. ↑ Henner Schierenbeck (Ed.): Bank and Insurance Lexicon . 1994, ISBN 978-3-486-78506-7 , pp. 165 ( limited preview in Google Book search).
  17. ↑ Regulation (EU) No. 648/2012
  18. ↑ ECJ, judgment of March 4, 2015, Az .: T-496/11, United Kingdom of Great Britain and Northern Ireland v European Central Bank
  19. ↑ BT-Drs. 17/5712 of May 4, 2011, draft law to further facilitate the restructuring of companies. P. 28.
  20. ↑ Klaus Peter Berger: The offsetting contract. 1996, p. 36.
  21. ↑ Valerie Simonart: La Revue de la Banque. 1994, p. 122.