ReMATCH, the CDS portfolio rebalancing and market risk mitigation service, announced today that it has removed $97 billion of risk in Western European sovereign credit default swaps since launching its sovereign CDS service in November 2010, significantly reducing market risk for each of the major participating banks.
ReMATCH has run 35 Western European sovereign CDS sessions since launching its service, with a total of eleven banks participating. Previous sessions have included CDS on Portugal, Italy, Ireland, Greece and Spain as well as France, the U.K. and Germany. In total, ReMATCH has removed $187 billion of risk in sovereign CDS across both developed and emerging markets throughout Europe, Middle East and Africa.
In each session, ReMATCH collects portfolio data from participating banks and uses proprietary technology to build accurate mid-level curves and generate risk-reducing trades, enabling market participants to exit positions that they may otherwise have been unable to.
Steve Schiff, ceo of ReMATCH said; “The extreme levels of volatility in sovereign CDS markets have not gone away and we are seeing more banks using our service. By submitting CDS books to ReMATCH, banks can reduce their unwanted market exposure to sovereign CDS, help to reduce systemic risk and minimise the effects of further contagion inherent in the triggering of a sovereign CDS default.”
In addition, ReMATCH recently expanded its service to include European financials, following the successful launch of US financials in February this year.
Since its launch in October 2009, ReMATCH has worked with the majority of major banks to reduce exposures to CDS market risks in European and Latin American emerging market credit default swaps. ReMATCH is part of the Post Trade Risk and Information portfolio of businesses of ICAP plc (IAP.L).
