Clearing House - Looking at the Swamp

Getting a bigger picture on Clearing House:

http://en.wikipedia.org/wiki/Clearing_house_%28finance%29

A clearing house is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions. These transactions may be executed on a futures exchange or securities exchange, as well as off-exchange in the over-the-counter (OTC) market. A clearing house stands between two clearing firms (also known as member firms or clearing participants) and its purpose is to reduce the risk of one (or more) clearing firm failing to honor its trade settlement obligations. A clearing house reduces the settlement risks by netting offsetting transactions between multiple counterparties, by requiring collateral deposits (a.k.a. margin deposits), by providing independent valuation of trades and collateral, by monitoring the credit worthiness of the clearing firms, and in many cases, by providing a guarantee fund that can be used to cover losses that exceed a defaulting clearing firm's collateral on deposit.

Clearing Houses can operate in the domain of near money, financial paper valued in terms of dollars that are not dollars but trade on the basis of some relation to real dollars.  They can also operate in the domain of real M2 currency to perform a clearing function.  Evidently "Clearing House" as described here is specifically meant to define transctions outside the M2 money domain.  Beyond M2 they trade at volumes and values far beyond real currency but evidently when final settlement comes due in that funny money domain then its obscure and distant relationship to real M2 currency money we use to buy real things in the real world of money where we use it as a medium of exchange become extremely visible.