What is a clearing bank, in specific, what does RMB clearing bank do?
"Clearing means processing unsettled transactions. Specifically - all the money transfers between the banks, in this case. Clearing Bank for RMB business means that all RMB transactions will be cleared through that specific bank. If bank A in Hong Kong gets a check drawn on Bank B in Hong Kong, and the check is in RMB - A will go to the BoC with the check and will get the money, and BoC will take the money from B. That obviously requires both A and B have accounts with BoC. ""Sole"" clearing house means there's only one. I.e.: in our example, A and B cannot settle the check through C where they both happen to have accounts, or directly with each other. They MUST utilize the services of BoC."
The check clears when the receiving bank successfully pulled the money from the issuing account. However, the receiving bank may hold the money for an additional time before giving it to you. Sometimes this is done for good reasons (to prevent Check kiting) and sometimes this is about the bank having the money interest free for a bit, or just their own processing convenience. The RDFI (Receiving Depository Institution) is the place where you keep your money and where the Debit is going to be made. Unfortunately the Debit did not go through for some kind of regulatory reason that I don't understand. You could ask them why people are not allowed to make ACH Debits there or you can try to pay through a different bank. For an individual there will not be much impact immediately. This arrangement will help Corporates and Banks settle payments more easily. - It would typically help companies dealing with Yuan [Buying or selling to China or Countries that accept Yuan as payment] to make payments at a cheaper cost & in less time. - In the near future it would make it easier for companies to invest more into China financial markets - It would also open up / create new market for derivatives and other allied products - It would also make Singapore a market place for Yuan outside China [and Hong Kong] resulting in more money and related product. In a related move this would make it easy for Singapore Central Bank to invest in China.   Once the markets matures more, there could be some products for Individuals. gimme a break. There is always shit storm. Other country experience recession and deep recession (under US economic attack even) but none drop that kind of money.  I still want to know what China is doing to even up Obama's attempt to crash their market and currency. "There was recently a Chinese temporary ban of crypto currency platform ICOs, followed by a bunch of fake news of crypto currencies being banned, then some uncertainty instilling official statements. China is improving regulation and oversight for crypto currency exchanges and ICOs. This was much needed, but in the short term people are freaking out and exclaiming that ""Bitcoin is banned""." One interpretation of the above is that Pound (alongside US Dollar, Euro and other major curriencies), which forms the Forex basket of countries has dropped to less than 10% weightage in case of China's Forex holding. Now the question is where did this money go, this money probably have gone into Forex market to buy Yuan against Pound/Dollar etc. to bolster or strengthen Yuan. The currency reserve management is the 'wealth' management part and the 'currency' management part is what is known as 'central bank intervention' to stabilize the currency. Wiring is the best way to move large amounts of money from one country to another.  I am sure Japanese banks will allow you to exchange your Japanese Yen into USD and wire it to Canada.   I am not sure if they will be able to convert directly from JPY to CND and wire funds in CND.  If you can open a USD bank account in Canada, that might make things easier. "No money is gone.  The movement of the existing currency has slowed down.  Currency moves through the economy through deposits or loans to banks, and withdrawal from banks as proceeds from loans or return of deposits.  When a bank makes a loan they provide a balance in a bank account, which isn't converted to hard currency until withdrawn.  So those bank loans essentially count as currency, and thus effectively multiply the stock of currency available.  Deposits into money market funds, and those funds loans into the commercial paper markets, have the same effect.  Banks and money funds are now making fewer loans.  In particular they are not funding ""companies"" that invested in securitizations of home mortgages and credit card receivables, but they are also lending less to businesses and consumers.  Because they are lending less they are ""effectively multiplying"" the currency less.   Think of deposited and lent currency as spare cycles on a desktop computer.  You let your computer help decipher the genome when you aren't using it yourself.  If you somehow feared that you would lose those cycles, slowing down your own computing, you would be less likely to lend those cycles out.  There would still be the same number of computing cycles in the world, but the stock of those available for actual computing would appear to be diminished.  The technical term for this concept is ""monetary velocity"" and it is a crucial factor in determing the level of overall economic activity, banking stability, and inflation." Chinese currency is not freely convertible. Its exchange rate is not determined by the market but rather by the Chinese government. Thus the counter-intuitive result. In essence, the Chinese government is subsidizing exports (which is reasonable since exports is what drives the Chinese economy). "Members of the Federal Reserve System keep track of what money a bank has (if it's not in the vault), who owns what shares of stock, who owns what bond, etc. The part of the Federal Reserve System that tracks stock ownership is the Depository Trust Company (DTC). They have a group of subsidiaries that settle various types of security transactions. DTC is a member of the U.S. Federal Reserve System, a limited-purpose   trust company under New York State banking law and a registered   clearing agency with the Securities and Exchange Commission. There's lots of information on their website describing this process. DTCC's subsidiary, The Depository Trust Company (DTC), established in   1973, was created to reduce costs and provide clearing and settlement   efficiencies by immobilizing securities and making ""book-entry""   changes to ownership of the securities. DTC provides securities   movements for NSCC's net settlements1, and settlement for institutional   trades (which typically involve money and securities transfers between   custodian banks and broker/dealers), as well as money market   instruments. Black pools are trades done where the price is not shared with the market. But the DTC is the one who keeps track of who owns which shares. They have records of all net transactions2. The DTC is the counterparty for transactions. When stock moves from one entity to another the DTC is involved. As the central counterparty for the nation's major exchanges and   markets, DTCC clears and settles virtually all broker-to-broker equity 1. This is the link that shows that settlements are reported on a ""net basis"". 2. If broker A sells 1000 shares of something to broker B at 8 and then five minutes later broker B sells the 1000 shares back to A, you cannot be sure that that total volume will be recorded. No net trading took place and there would be fees to pay for no reason if they reported both trades. Note: In dark pool trading quite often the two parties don't know each other. For shares (book-keeping records) to be exchanged it has to be done through a Clearing House." ##CHAPS The Clearing House Automated Payment System or CHAPS is a British company established in London in February 1984, which offers same-day sterling fund transfers.  A CHAPS transfer is initiated by the sender to move money to the recipient's account (at another banking institution) where the funds need to be available (cleared) the same working day. Unlike with a bank giro credit, no pre-printed slip specifying the recipient's details is required. Unlike cheques, the funds transfer is performed in real-time removing the issue of float or the potential for payments to be purposely stopped by the sender, or returned due to insufficient funds, even after they appear to have arrived in the destination account.  ***  ^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&amp;message=Excludeme&amp;subject=Excludeme) ^| [^Exclude ^from ^subreddit](https://np.reddit.com/r/finance/about/banned) ^| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index)   ^] ^Downvote ^to ^remove &gt; But then why wouldn't that be their primary mode to control their currency now/are they starting/hinting at doing so to move away from US treasuries?  China is massively pumping their economy with easy loan. They have pretty much stoped/holding steady dollar piling.  The question you have to ask, how can China accumulate surplus, not accumulating dollar, yet have their currency very much steady against dollar.  China does not use treasury purchase as primary mean to control Yuan price anymore. Automated Clearing House transactions are used in the US for direct deposit of pay checks and direct debit of many payments for accounts such as mortgages, credit cards, car loans, insurance premiums, etc. The reason they take one or more business days to clear is that the transactions are accumulated by each processor in the network during the day and processed as a batch at the end of each business day.  The ACH network processes 20+ billion transactions per year worth $40 trillion, (estimates based on 2012 figures). This is adequately covered by the differential between lending and receiving interest rates.  ...and technically, they pay the central bank an interest rate on the money lent as well, which means that they *are* paying back equity holders (all be it very slowly and very slightly).  The equity holders have the ability to will money into existence, so there's no artificial limitation they face with respect to the branch banking system. I noticed the buy/sell board table.  Where did you notice this. Generally for a pair of currencies, there is Unit associated along with direction. The Unit is generally constant. These are only revised when there is large devaluation of a particular currency. Buying Php for MYR 8.52, Selling MYR 8.98. So in this case the Unit of PHP is 100, so Bank is Buying 100 PHP from you [you are selling PHP] and will give you MYR 8.52.  If you now want to buy 100 PHP [so the Bank is selling you], you have to pay MYR 8.98.  So you loose MYR 0.46 Why are they selling it way beyond the exchange rate? Why is this? As explained above, they are not. Its still within the range. The quote on internet are average price. This means before going back to Philippines, I can buy a lot of peso that I can buy and exchange it for higher price right? Generally an individual cannot make money by buying in one currency and selling in other. There are specialist who try and find arbitrage between multiple pair of currencies and make money out of it. Its a continuous process, if they start making profit, the market will react and put pressure on a pair and the prices would move to remove the arbitrage.