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Abhishek Jhanwar
The transaction handled by FEDWIRE settlement system can be classified in two categories:
1)Transfers between Reserve Deposit Account (or settlement accounts) of all financial institutions in the U.S. with their affiliates. ) 2)Transfers of government securities through which treasury bills and federal reserve agency conduct securities related settlements. It is a settlement a operating in New York Clearing House Association and was established as means of settling Euro dollar transactions. CHIPS settlement are conducted in the following manner:
1)Payment instructions are sent out and received continuously during the day .Each member s net balance continues on changing, but at the cut-off time, every member fixes its own net balance including the portions on behalf of non-settling banks.
2) The fixed net balance is then settled between CHIPS accounts and and the banks' account with the federal reserve bank of New York through FEDWIRE. Settlement is done before the settlement is closed and as a result the CHIPS account balance becomes zero.
In this system
Characteristics of SIC
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