US 2006/0080217 A1Published application

Clearing house for buying and selling short term liquidity

OwnerGrenville Blackall, Lynn Evansinventors

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Abstract

A clearing house process for buying and selling short term liquidity, such as Fed Funds, by financial institutions into an open, fair, and efficient market. The process automatically matches all trades at a preset rate and automatically clears and confirms the trade through a secure on line website. Sellers manage their buying partner risk up front by selecting individual partners, regional partners, and/or partners with predetermined risk profiles, as well as by limiting dollar exposure to each partner as a percent of equity. Rates are published on the system each day. The trading financial institution enters its trades by an individual approved by the financial institution. The clearing house process may also comprise a few selected high quality upstream correspondent banks for excess liquidity and a settlement arrangement through the Federal Reserve Bank.

Claims47

Dependent claims

A computer process for automating management of subscriber short term liquidity, comprising the steps of:

(a) calculating a risk parameter for seller subscribers based upon published buyer subscriber (i) financial information and (ii) short term liquidity borrowing activity;
(b) specifying buyer subscribers to which a seller subscriber will sell short term liquidity and listing the maximum amount the seller subscriber will sell to each specified buyer subscriber;
(c) disclosing rates for buying short term liquidity and selling short term liquidity in advance of trading short term liquidity;
(d) providing directed short term liquidity trading, optionally, in (i) a target amount over a specific period of time or (ii) a specific amount at a specific time;
(e) providing optional short term liquidity trading to satisfy unmet directed short term liquidity trading;
(f) trading short term liquidity buyer subscriber and seller subscriber orders by matching a buying subscriber with a selling subscriber that (i) meets the selling subscriber's risk parameter and (ii) has the same clearing house as the selling subscriber;
(g) satisfying directed trades and then satisfying unmet directed trades with optional trades;
(h) executing final settlement of trades through the buying and selling subscribers' respective settlement accounts;
and (i) sending confirmation of trades to selling and buying subscribers.

6 more elements

Dependencies are inferred from the claim text.