(CHIPS) The Clearinghouse Interbank Payment System (CHIPS) is a private payment-clearing system located in New York City and operated by the New York Clearinghouse Association. The network specialized in international payments denominated in US dollars. It is estimated that CHIPS transfers 90 percent of all international, interbank dollar transactions. CHIPS tabulates transaction data for all member banks at the end of each day. The system also permits members to review payments online, that is, those in storage awaiting approval. This gives member banks better information about available funds on which to base their credit decisions. A bank officer may be more willing to grant credit knowing that CHIPS will credit a certain account later in the day. Although the system is highly technical, CHIPS’ membership, operating procedures, and efficiency have important economic implications. For one, the role of the US dollar as a world transaction currency is influenced by the relative operating efficiency and safety of its payment mechanism. Further, depending upon CHIPS’ handling of failures to settle accounts, such an occurrence can be either an isolated event, or the first link in a chain reaction leading to a worldwide liquidity crisis. Last, but not least, the specific roles of individual banks in the dollar clearing system have important implications for worldwide correspondent banking relationships and, therefore, market share and profits.