Premium Essay

Chipco

In: Business and Management

Submitted By absinthe1200
Words 507
Pages 3
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...global network processed close to 4 trillion messages. 3See, for example, Ammer and Brunner (1997), Lyons (1998), and Mende and Menkhoff (2006). Chapter 2 The Foreign Exchange Market 57 After the verbal deal is electronically confirmed over SWIFT, the deal also has to be settled. Citibank will transfer dollars to BNP Paribas in the United States, and Citibank will receive euros from BNP Paribas in Europe. The transfer of dollars will be done through the Clearing House Interbank Payments System (CHIPS), and the transfer of euros will be done through the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET). CHIPS is a private-sector system, owned and operated by The Clearing House Interbank Payments Company L.L.C. (CHIPCo), whose membership consists of many of the world’s largest commercial banks. CHIPS is an electronic payment system that transfers funds and settles transactions in U.S. dollars. It is the central clearing system in the United States for international transactions, handling the bulk of all dollar payments moving between countries around the world. On a typical day in New York, about $1.5 trillion in business payments pass through CHIPS computers. This amount corresponds to more than 350,000 international transactions, such as foreign trade payments, foreign exchange transfers, securities settlements, and money market transactions, as well as a growing number of domestic payments. CHIPS participants receive same-day settlement of......

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