ING Bank NV, Natixis SA and Rabobank NV are the latest banks to join SwapClear, LCH.Clearnet’s market leading over-the-counter (OTC) interest rate swap clearing business. All three banks have commenced implementation and are expected to go live later this year.
Established in 1999, SwapClear enables major global swap dealers to reduce the risk and processing costs in the interbank interest rate derivatives market. SwapClear was the world’s first OTC clearing service and now clears circa 50% of the global interbank interest rate swap business.
In a unique, industry-led approach, the interest rate swap community have worked with LCH.Clearnet for the last ten years, through OTCDerivNet, to develop and improve the market infrastructure for interest rates.
Joe Reilly, director of SwapClear, LCH.Clearnet said: “We are delighted to welcome the three banks who all are important participants in the market. As firms increasingly look to minimise counterparty risk, we have seen a heightened awareness of the value of the SwapClear service to the market. With the industry we have built a highly successful OTC clearing model.”
Gunter Fluyt, global head Rates at ING Bank NV said: “We consider clearing to be the most effective way forward for interbank interest rate derivative trading and expect to benefit greatly from the enhanced credit capacity and risk reduction that it will bring.”
Tanguy Loreau, head of derivatives operations, Natixis SA said: “Counterparty risk reduction, with the freeing up of credit lines and resulting reduction of collateral together with more efficient use of our capital are the primary drivers for our decision to join SwapClear.”
Henk Rozendaal, global head of interest rate derivatives, Rabobank NV said: “SwapClear does what it says on the box: reduces counterparty risk, enhances straight through processing, saves capital and reduces the balance sheet. Joining SwapClear will enable us to develop our interbank swap business further and to benefit from the increasing flows of business with the other SwapClear members.”
