At the end of each period, for example a day, banks calculate how much money was paid from accounts at bank A to those at bank B, from bank C to bank A, etc This results in a net credit or debt between the banks.
Rather than send all the transactions back and forth, banks will "clear" this net amount between themselves. The "clearing house", which in the US is often either CHIPS [1] or Fedwire [2], handles this process, which handle most large interbank US dollar transactions globally. (Clearing also seems to mean currency exchange in the US, according to WSJ).
BNP used this service in the US, so it fell under US law.
Rather than send all the transactions back and forth, banks will "clear" this net amount between themselves. The "clearing house", which in the US is often either CHIPS [1] or Fedwire [2], handles this process, which handle most large interbank US dollar transactions globally. (Clearing also seems to mean currency exchange in the US, according to WSJ).
BNP used this service in the US, so it fell under US law.
[1] http://en.wikipedia.org/wiki/Clearing_House_Interbank_Paymen...
[2] http://en.wikipedia.org/wiki/Fedwire