SwapClear compresses over $1 quadrillion of cleared notional
- Landmark milestone for LCH’s interest rate derivatives compression service
- Notional outstanding now stands at $280 trillion, down from all time high of $452 trillion in November 2013
- Over one million trades, representing $115 trillion in notional compressed so far in 2016
- Continued strong uptake of compression services by members and their clients
LCH, the global clearing house, today announced that its SwapClear service has compressed a total of over 8.4 million cleared trades, representing $1 quadrillion ($1,000,000,000,000,000) in notional since it started offering compression services in 2008. This milestone follows a number of recent innovations in SwapClear’s compression offering which have significantly expanded the number of trades eligible for compression.
Compression is a process in which clearing members and their clients can “tear-up” offseting trades to reduce the notional outstanding and number of line items in their portfolio. SwapClear offers a number of types of compression, via LCH proprietary services and through TriOptima’s triReduce service. In October 2015, SwapClear expanded its blended-rate compression offering to enable members and their clients to compress FRAs. Further enhancements are planned including multilateral compression for buyside customers, in conjunction with TriOptima, and LCH duo compression services.
Cameron Goh, Head of Clearing Solutions, SwapClear and Listed Rates, LCH said: “Compressing this volume of Swaps is a significant achievement for us. Capital efficiency is top of mind for many banks, who are looking for ways to drive down their notional outstanding. As a result, demand for compression services are at an all time high. We’re pleased to be able to support our members and their clients in achieving significant capital savings and operational efficiencies.”
Peter Weibel, CEO of triReduce, said: “TriOptima’s collaboration with LCH enables their clearing members to compress their portfolios every week via triReduce, our multilateral, risk-constrained compression service. We are looking forward to implementing new exciting enhancements that will increase the compression efficiency even further.”
For further information
Rhiannon Davies, Tel: +44 (0)20 7426 7523
Lucie Holloway, Tel: +44 (0)20 7797 1126
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LCH is a leading multi-asset class and multi-national clearing house, serving major exchanges and trading platforms as well as a range of OTC markets.
LCH’s world-class risk management framework provides exceptional levels of protection to international markets, as has been proven through the management of past defaults. As demand for robust clearing services continues to grow, LCH is committed to achieving the highest standards of risk management across all asset classes cleared.
LCH is majority owned by London Stock Exchange Group (LSE.L), a diversified international market infrastructure group that sits at the heart of the world's financial community.