Final answer:
True, clearinghouses establish capital adequacy standards and trade reporting practices for their members to secure the honoring of trading contracts.
Step-by-step explanation:
Clearinghouses do indeed play a critical role in establishing capital adequacy standards and trade reporting practices for their member institutions. Their primary function is to ensure that all parties involved in trading contracts honor their obligations, thereby providing stability and trust in the financial markets. By setting capital requirements, clearinghouses make sure that their members have enough capital to cover potential losses, which mitigates the risk of default. Additionally, the trade reporting practices mandated by clearinghouses provide transparency and allow for the accurate tracking of trades, which is essential for the effective monitoring and regulation of financial markets.
The information provided regarding the U.S. Department of the Treasury's role in compiling reports on international flows of capital is related to how data on economic activities, such as trade and investment, is gathered and verified. These mechanisms contribute to the overall reliability of financial statistics, like the U.S. balance of trade, but are not directly related to the systems and standards put in place by clearinghouses.