The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIV. Money clearance and settlement

Collection:: Economics Books

MONEY CLEARANCE AND SETTLEMENT 397 the member has a credit he can draw upon his account there for it. But as with other credits or charges on members’ ac- counts there, the Stock Clearing Corporation must be in every case specifically ordered to perform this service for its members. Accommodation Allowed to Clearing Members.—Against the possibility of insolvency on the part of a clearing member, the Stock Clearing Corporation has its “clearing fund,” which is deposited on demand in various New York banking insti- tutions and is thus always liquid and entirely at its immediate disposal. But with the exception of this “clearing fund,” the Stock Clearing Corporation starts its operations each morning without a cent of money or a single security certificate in its members’ accounts or its cages, and each evening ends its day’s operations in the same position. All money which its members pay into the Corporation, and all securities which they deliver to it, are withdrawn from it by them the same day. The same basic situation of course obtains in all bank clearing houses; like them, the Stock Clearing Corporation is merely an agent of its members for the settlement of their contracts with each other. Nevertheless, during the day the Stock Clearing Corpora- tion may in fact extend considerable temporary accommoda- tion to its members. For a clearing member may receive secur- ity deliveries faster or more extensively than he makes them, and in this way run up large debits on his Stock Clearing Cor- poration account which are not, temporarily at least, offset by the establishment on it of offsetting credits. Likewise, a clear- ing member may get the Corporation to pay off a collateral loan for him, and then rapidly or extensively withdraw the security collateral from his cage, thus leaving a large unsecured debit therefor on his account. In consequence, one of the most im- portant tasks of the Corporation consists in vigilantly watching such temporary extensions of its credit to its members, and preventing them from becoming excessive. The maximum amount of daily accommodation which the

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