Definition of clearinghouse
1 : an establishment maintained by banks for settling mutual claims and accounts
2 : a central agency for the collection, classification, and distribution especially of information; broadly : an informal channel for distributing information or assistance
Examples of clearinghouse in a Sentence
an online clearinghouse for information on museums around the world
Recent Examples of clearinghouse from the Web
Designed by a group of techies in Oregon, the app was intended to be a clearinghouse where bands and musicians could be hired directly, cutting out the booking-agent middlemen.
But the central bank would have the power to monitor clearinghouse operations and take action in a crisis.
Manfra said the agency has also worked with the federal Election Assistance Commission, an information clearinghouse for states, to share some information.
For patients, this can seem like an elaborate, never-ending maze—and there is no central clearinghouse for the information.
Building off of 300 million mod downloads for Fallout 4 and Skyrim, Bethesda announced Creation Club, a new, more integrated in-game modding clearinghouse.
The Illinois State Fire Marshal is handling the investigation, and Monday evening residents were gathered for an update from officials at Marengo Community High School, where the Red Cross has set up a clearinghouse for assistance.
Rather than option him to the minors, the Dodgers shipped him to their clearinghouse for wayward starters: The bullpen.
Responded Junior: Throughout Comey’s testimony, Don Jr.’s Twitter feed functioned as a clearinghouse for conservative talking points, analysis, and rebuttals:
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'clearinghouse.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of clearinghouse
Financial Definition of CLEARINGHOUSE
What It Is
A clearinghouse is an intermediary between buyers and sellers of financial instruments.
How It Works
Clearinghouses take the opposite position of each side of a trade. When two parties agree on the terms of a transaction, a clearinghouse sits in the middle, acting as both the buyer and the seller. Clearinghouses exist to ensure the smooth functioning of financial markets. Fewer transactions would take place if sellers were worried that buyers would refuse to pay them, and vice versa. A clearinghouse ensures that transactions happen as planned.
For example, if you agree to sell your 100 shares of Company XYZ to John for $10,000, the clearinghouse ensures that John is delivered the 100 shares and you are delivered $10,000. It also records and reports the transaction to everyone involved. Either way, the clearinghouse is responsible for ensuring that the transaction happens in an accurate and timely manner.
Clearinghouses operate in most areas of the business world. For example, in the futures markets, clearinghouses ensure that the buyers and sellers fulfill their obligations related to the futures contract being traded and oversee the proper delivery of the underlying instrument. A country's central bank (e.g. the Federal Reserve in the U.S.) acts as a clearinghouse for checks, interbank payments, foreign exchange transactions, and other fund transfers in the banking system.
Why It Matters
Clearinghouses, acting as middlemen between buyers and sellers, provide both efficiency and stability to the financial markets they serve. However, they take on a high amount of risk because they act as both buyer and seller for a brief moment in almost every transaction. If a buyer fails to pay for the securities he has purchased, the clearinghouse must seek recovery of the funds or wait for them to become available.
Because the clearinghouse is on the hook if either party defaults on their agreement, they generally will not process transactions for traders who take on too much risk. To mitigate risk, clearinghouses also often require traders to deposit additional funds into their brokerage accounts in order to maintain minimum "margin requirements." These funds ensure that the clearinghouse will have access to enough funds to offset losses incurred by traders to get in over their heads and fail to meet their financial obligations.
CLEARINGHOUSE Defined for English Language Learners
Definition of clearinghouse for English Language Learners
: a business that banks use to exchange checks and money between them
: an organization that collects and gives out information about a specific thing
Legal Definition of clearinghouse
: an institution that arranges for payment of checks owed by one bank to another
Seen and Heard
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