The total nominal value of trades across LCH.Clearnet’s European fixed income business reached circa €28 trillion in the fourth quarter of 2008, a 14% increase on the same period in 2007.
LCH.Clearnet saw an increase in both Euro and Sterling volumes as, in the aftermath of Lehman’s, banks sought to minimise their counterparty risk through a cleared repo solution; using LCH.Clearnet’s fixed income service as a key vehicle for inter-bank lending. The increase in Sterling GC volumes was particularly marked. Sterling GC is a standardised basket of cash led repo trades which enables users to benefit from deep trading liquidity and the efficiencies of a standard process for addressing their sterling funding needs.
John Burke, director of fixed income, said “Minimising counterparty risk has been the priority of many banks over the last few turbulent months. The growth in our volumes reflects the success of our fixed income service as an important tool which underpins inter-bank lending in the Euro and Sterling markets.
“We anticipate an ongoing need for innovative, risk mitigating clearing solutions and we shall continue to work closely with our member banks to design secure and efficient liquidity solutions.”