Press Release CHIPS Celebrates 40th Anniversary Milestone

Press ReleaseCHIPS Celebrates 40 th Anniversary MilestoneNation’s First Real-Time Electronic Funds Transfer Network Continues to PlayLeading Role in Facilitating Global LiquidityIYA DAVIDSONOffice: 212.613.0133Mobile: 917.838.9913iya.davidson@theclearinghouse.orgNew York – April 6, 2010 – The Clearing House, the nation’s premier bank-ownedpayments solutions provider and industry forum, today announced the 40 thanniversary of CHIPS, the company’s large dollar payments system. The onlyprivate-sector, real-time wire transfer network, CHIPS processes 350,000 paymentsdaily with a value of $1.6 trillion.“Since it went live on April 6, 1970, CHIPS has dramatically changed the landscapeof payments systems and has become a critical part of the global economicinfrastructure,” said Rossana Salaris, SVP, Payments Products, The Clearing House.“What began as nine participants trading payments not in excess of $10,000 is now anetwork of 48 leading financial institutions representing 22 countries that isresponsible for 95% of all international US dollar clearing.”The concept for CHIPS originated in 1966, when the Bank Operations Conference ofthe New York Clearing House Association (predecessor to The Clearing House)identified the need to provide a quicker and more efficient alternative to officialchecks used for interbank payments. As part of a feasibility study on automating suchpayments, a computer system test was performed to determine whether electronicsignals could act as a proxy for the paper transfer of funds between banks. Thissuccessful experiment became the Clearing House Interbank Payments System orCHIPS.Today, CHIPS is considered the most liquidity efficient wire transfer system in theworld due to its unique, patented multilateral netting capability and pre-fundingprocess. CHIPS maximizes the use of liquidity without daylight overdraft charges. Asingle dollar in the CHIPS system can clear $500 - $600 in payments over the courseof the payments day. For participating financial institutions, this translates intostreamlined operations and greater availability of funds for other cash managementactivities.Evolving from a system of same day settlement combined with bilateral credit limitsand sender net debit caps into a real-time netting process, CHIPS has also been veryeffective in reducing credit exposure and mitigating systemic risk.

Page 2“CHIPS is the industry standard for wire system liquidity, resiliency and operationalefficiency in a wire transfer system and has been an important part of our customervalue proposition since it was launched,” said Frank Behlmer, Executive VicePresident, Chief Operating Officer, Global Operations, BNY-Mellon.As the business and regulatory environments evolve, The Clearing House remainsfocused on enhancing CHIPS to keep pace with the changing needs of the financialservices industry. Last year, CHIPS worked with the Society for Worldwide InterbankFinancial Telecommunication (SWIFT) and the Federal Reserve Banks to developand implement a new cover payments message format intended to improve thetransparency of international wire transfers and support the Treasury Department’santi-money laundering and anti-terrorist financing initiatives. In November 2010,CHIPS, along with The Federal Reserve’s Fedwire, will introduce a 9,000 characterremittance format that will enable structured invoice information to travel along with awire payment. This augmented format will eliminate costly reconciliation processesand bring wire and ACH remittance standards in parity for the first time in history.Additionally, in an increasingly global economy, CHIPS has significantly expanded itsfootprint to serve the needs of international banks. Today, Chinese financialinstitutions comprise the largest concentration of CHIPS participants outside theUnited States, with transactions to, from, or within Asia representing 41% of CHIPSvolume.About The Clearing HouseEstablished in 1853 and owned by 20 of the largest banks in the United States, TheClearing House is a leading private sector provider of payments settlement andclearing services to financial institutions worldwide. The Clearing House processesnearly 66 million ACH, wire transfer, and image exchange transactions daily with anaverage US dollar value of $2 trillion.The Clearing House Association, a not-for-profit arm of The Clearing House, has along distinguished history of serving as a forum for collaborative thought and actionon regulatory, judicial and legislative issues of importance to the banking industry.For more information, please visit www.theclearinghouse.org.