London Clearing House

The London Clearing House (LCH) is a financial clearinghouse that acts as an intermediary between buyers and sellers of financial instruments, such as derivatives and securities. Its primary role is to reduce risk by ensuring that transactions are completed smoothly, even if one party defaults. LCH guarantees the completion of trades, manages collateral, and maintains stability within the financial system. By centralizing and standardizing the clearing process, it helps facilitate efficient, transparent, and secure market operations, which benefits all participants, including banks, investment firms, and other financial institutions.