SwapClear reveals record-breaking 2016
09 January 2017 London
Image: Shutterstock
LCH’s SwapClear service saw a record high in interest rate derivatives cleared in 2016, processing a total of over $665 trillion in 3.8 million trades.
This represents a 25 percent increase in clearing volumes compared to 2015.
Buy-side clearing volumes also hit a record high of $139 trillion cleared. According to LCH, these increases can be partly attributed to customers clearing new products, such as inflation swaps, and to the ongoing effects of regulatory change.
SwapClear’s compression service also saw increased activity, with more members and clients using the service, and a record high of $384 trillion in notional compressed throughout the year.
The service allows clearing members and their clients to reduce the number of items in their portfolios, and therefore reduce their notional outstanding.
Increased use of the compression services could have been encouraged by expansion to the offering, which now includes compression of inflation swaps and multilateral compression for clients.
Cameron Goh, global head of product management, rates and foreign exchange derivatives at LCH, said: “Capital and balance sheet management continues to be a top priority for banks impacted by the Basel III capital requirements. Central clearing and the use of compression remains an extremely effective method of driving down notional outstanding and line items in a portfolio, with the goal of maximising capital and operational efficiency.”
He added: “We will continue to work with our members to further expand the services available to them to bring more efficiencies to the market.”
The compression services are now being used by 97 clearing members and 510 clients, more than ever before.
This represents a 25 percent increase in clearing volumes compared to 2015.
Buy-side clearing volumes also hit a record high of $139 trillion cleared. According to LCH, these increases can be partly attributed to customers clearing new products, such as inflation swaps, and to the ongoing effects of regulatory change.
SwapClear’s compression service also saw increased activity, with more members and clients using the service, and a record high of $384 trillion in notional compressed throughout the year.
The service allows clearing members and their clients to reduce the number of items in their portfolios, and therefore reduce their notional outstanding.
Increased use of the compression services could have been encouraged by expansion to the offering, which now includes compression of inflation swaps and multilateral compression for clients.
Cameron Goh, global head of product management, rates and foreign exchange derivatives at LCH, said: “Capital and balance sheet management continues to be a top priority for banks impacted by the Basel III capital requirements. Central clearing and the use of compression remains an extremely effective method of driving down notional outstanding and line items in a portfolio, with the goal of maximising capital and operational efficiency.”
He added: “We will continue to work with our members to further expand the services available to them to bring more efficiencies to the market.”
The compression services are now being used by 97 clearing members and 510 clients, more than ever before.
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