TriOptima announces today that it eliminated $84 trillion in OTC derivatives notional principal outstanding in 2012: $80.5 trillion in interest rate swap notionals and $3.5 trillion in credit default swap (CDS) notionals. Of the $80.5 trillion, almost $72 trillion in reduced interest rate swap notionals were the result of ongoing efforts by LCH SwapClear, its member institutions and TriOptima to reduce outstandings in the clearinghouse.
Since TriOptima introduced its triReduce portfolio compression service in 2003, more than $322 trillion in notional principal outstandings have been eliminated: $245 trillion in interest rate swap notionals and $77 trillion in CDS notionals. Reducing gross notionals contributes to overall financial stability while also eliminating costs, credit and operational risk and capital requirements for the individual participants.
“We continue to work with the banks and clearinghouses to reduce gross notional exposure as final rules are published by the global regulators,” said Peter Weibel, CEO of triReduce. “We are pleased that market participants continue to compress CDS and bilateral interest rate swaps while also focusing on cleared trades. We also began collaborating with SGX in 2012, and look forward to supporting other clearinghouse initiatives as they develop. Our 2013 plans include expanding the range of emerging market currencies for interest rate compression, adding products eligible for triReduce Commodities and introducing cross-currency terminations.”
