Asked by Claire Fening on May 30, 2024
Verified
An association of banks and other payors whose members settle accounts with each other on a daily basis is a:
A) payor banking group.
B) clearinghouse.
C) provisional reserve.
D) credit union.
Clearinghouse
An intermediary agency or institution that facilitates the exchange and settlement of financial transactions among different entities.
Payor Banking Group
A consortium or group of banks that manages the payment and settlement of transactions for clients.
- Identify the purpose and operational role of clearinghouses within the banking sector and understand the regulatory deadlines for the processing of checks.
Verified Answer
WS
William SieberMay 31, 2024
Final Answer :
B
Explanation :
A clearinghouse is an intermediary between buyers and sellers of financial instruments. It ensures the efficient and secure transfer of payments and securities, facilitating the daily settlement of accounts among its member institutions, which can include banks and other financial entities.
Learning Objectives
- Identify the purpose and operational role of clearinghouses within the banking sector and understand the regulatory deadlines for the processing of checks.