Clearingyhtiöt

Clearingyhtiöt, often translated as clearing houses, are financial institutions that act as intermediaries in financial transactions, most notably in securities and derivatives markets. Their primary function is to reduce counterparty risk, which is the risk that one party to a transaction will default on their obligations. By stepping into the middle of a trade, the clearing house becomes the buyer to every seller and the seller to every buyer. This central counterparty model ensures that trades are settled even if one of the original parties becomes insolvent.

Clearing houses are critical for market stability. They manage the daily settlement of trades, collect margin payments from participants to cover potential losses, and operate a default waterfall system to manage the financial consequences if a member defaults. This process involves not only netting obligations but also often holding collateral from their members. Their activities are typically highly regulated to ensure their solvency and operational integrity. Without clearing houses, the complexity and risk in modern financial markets would be significantly higher, potentially hindering trading activity and increasing systemic risk. They play an indispensable role in the efficient functioning of the global financial system.