[aquila48]

“The clearinghouse is there to avert and resolve those back office issues by gathering facts and applying skilled human judgment so as to resolve problems and claims quickly and fairly.”

It’s considerably more than just applying “judgement” - it is their job to insure that both sides of the transaction have the necessary funds/assets (plus margin) to cover the transaction. They’re like the escrow company in RE transactions.

[Rockingham]

True enough, but, almost always, automated systems first identify whether there are enough funds or assets on account or tendered in order to complete a transaction. The larger point is that while most transactions go through on that basis and the automated systems are tireless and easily expanded, human employees still remain essential in the clearinghouse and in back office operations. They are limited in numbers and in work hours. By regulation and practice, such human employees have to troubleshoot issues. Often, what looks like a default may be due to a simple human error that can be corrected with a telephone call or email or review of account records and processing routines.

Here are two securities dealer back office examples in the "we sent the check but it never arrived" department. After a change in the back office mail processing routine, there were several instances of missing checks left in envelopes. To remedy this, every days' accumulation of supposedly empty envelopes had to be filleted open and inspected. About once a month, a missing check was found. In other cases, managers in the local Fed-X or UPS or US Mail processing facility had to be called to "check the belts and bins" for missing envelopes. Several times this resulted in missing express envelopes being found.