Check Clearing, the Repo Market, and the Fed


I had a mental picture of how checks between banks got cleared. I decided that I needed more details. I have been reading articles. Here is one that might explain most of what I have learned I just realized that I have not made the connection to the overnight bank-to-bank lending process called the Repo market. I’ll make that connection next.

What Is the Automated Clearing House, and How Does It Work?

This article greatly expands my knowledge of the Repo market and the Federal Reserve’s role in the market. What is the repo market, and why does it matter?

Whie I am at it, I might as well throw in something about What Is the SWIFT Banking System? Investopedia.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system powers most international money and security transfers. SWIFT is a vast messaging network used by financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions.

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