...is a United States private clearing house for
large-value transactions. By 2015 it was settling well over US$1.5 trillion a
day in around 250,000 interbank payments in cross border and domestic
transactions. Together with the Fedwire Funds Service (which is operated by
the Federal Reserve Banks), CHIPS forms the
primary U.S. network for large-value domestic and international USD payments
where it has a market share of around 96%. CHIPS transfers are governed by
Article 4A of Uniform Commercial Code.
Unlike the Fedwire system which is part of a
regulatory body, CHIPS is owned by the financial institutions that use it. For payments that are less time-sensitive
in nature, banks typically prefer to use CHIPS instead of Fedwire, as CHIPS is
less expensive (both by charges and by funds required). One of the reasons is
that Fedwire is a real-time gross settlement system, while CHIPS allows payments to be netted.
No comments:
Post a Comment