LCH.Clearnet plans to launch clearing services for Credit Default Swaps (CDS) in the Eurozone by December 2009, subject to regulatory approval. The service will be managed by Paris-based LCH.Clearnet SA, which is a Eurozone bank and regulated by the Banque de France.
LCH.Clearnet has unparalleled expertise in clearing over-the-counter (OTC) derivatives and currently clears circa 50 per cent of the US $140 trillion global interbank interest rate swap market. In December 2008, LCH.Clearnet’s London operation was the first clearing house to launch CDS clearing for European indices, in association with Liffe.
The decision to launch a Eurozone CDS clearing offering is in response to both regulator and market demand. It demonstrates LCH.Clearnet’s commitment to offer market leading clearing solutions in Europe.
Christophe Hémon, chief executive, LCH.Clearnet SA said; “We are leveraging expertise from across the group to deliver the benefits of clearing to the Eurozone CDS market. We look forward to continuing to work with the European market to deliver innovative clearing solutions.
“Clearing is a highly effective means of reducing counterparty risk in any market and there is a real appetite within the Eurozone for a CDS clearing service.”