On The Choice Of The Settlement System In Europe And America And China's Commercial Banks Clearing Channels

With the development of globalization of economy, the speed and frequency of money transfer between countries are accelerating rapidly. In order to enhance the control of money transfer, governments around the world are strengthening their local clearing systems. At the same time, customers bring forward higher demands on the efficiency and safety of money transfer. In order to render better services to their customers, banks around the world are also strengthening their inter-bank clearing systems. Under this circumstances,great changes have taken place in clearing patterns: the role of correspondent is weakened, and the role of inter-bank clearing system is promoted, the choice of clearing channels shows diversification. To commercial banks, proper decision-making on channels choice has a significant meaning: it can not only ensure safe and efficient operation on money transfer, but also reduce bank costs and increase commission income. The selection is vital to the survival and development of the whole bank. Faced with stinging competition and changeful environment, the position on foreign currency clearing is rather austere. Since USD and Euro are the most important currencies in the world, this article will focus on the clearing systems and channels choices of the two currencies. The article contains two parts. Generally speaking, the USD clearing systems and clearing patterns are rather centralized and steady. The first part starts with the birth and development of the two main USD clearing systems - CHIPS and FEDWIRE, then compares the two systems in detail on framework, clearing method, operation scope, risk management and charging standard. Based on these analysis, the article uses Bank of China as a special case, analyzes the advantages and disadvantages of its USD channels choice, and makes valuable suggestions on the USD channels choice to other commercial banks in China. Compared with the highly monopolized USD clearing systems, due to the cross-border feature of Euro, the Euro clearing systems and channels choices are rather complicated. The second part firstly makes a brief introduction to the birth of Euro clearing systems, then focuses on the main characters and future development of the three cross-border Euro clearing systems - TARGET, EURO1 and EAF2. Then, the article also uses Bank of China as a special case, analyzes its Euro channels choice, and makes useful suggestions on the Euro channels choice to the same trades in China.