New functionality allows clients to seamlessly manage credit risk as Libor use declines
Broadway, a leading provider of high-performance front-office solutions, today announced support for trading Eris BSBY Swap Futures within Broadway’s flagship suite of fully hosted SaaS trading solutions. Offered by CME Group, Eris BSBY Swap Futures (Eris BSBY) allow market participants to forecast and hedge rates on the 3-month Bloomberg Short-Term Bank Yield Index (BSBY). The feature is currently live and available to all Broadway customers.
“Broadway is committed to investing in new technology and partnerships to ensure we offer our clients the most complete functionality and support to power their fixed income trading operations,” said Brad Small, Head of Product of Broadway. “As our clients focus on migrating from Libor to SOFR as the benchmark US interest rate, we are excited we can offer them timely access to innovative new interest rate derivatives such as Eris BSBY that allow them to stay ahead of critical priorities and maintain their competitive advantage.”
First announced by Bloomberg in early 2021, BSBY addresses banks’ requests for a credit-sensitive interest rate to manage the spread between their costs of funding and their interest earned on loans. Based on transactions of unsecured instruments used by banks to fund themselves, BSBY incorporates credit sensitivity into term rates of 1, 3, 6 and 12 months.
“As more banks add BSBY to their suite of interest rates used in commercial loans, Broadway’s support for Eris BSBY allows them to hedge these exposures using their preferred front-office trading solution,” said Michael Riddle, CEO of Eris Innovations, a futures product development company that licenses the patented product design to CME Group.
Eris BSBY Swap Futures are listed on and subject to the rules of CBOT.