CLS records continued growth in settled values of cross currency swaps
25 July 2022 UK
Image: mzsorasak
CLS, the financial market infrastructure firm, has recorded continued growth in settled values of cross currency swaps submitted to CLSSettlement, with a 27 per cent year-on-year increase.
By using CLSSettlement, participants can mitigate the settlement risk associated with cross currency swaps due to the high value of the initial and final principal exchanges, says CLS.
In addition, as cross currency swap flows are multilaterally netted against other foreign exchange transactions within CLSSettlement, users also benefit from a significant reduction in daily funding requirements.
Speaking on the announcement, Lisa Danino-Lewis, chief growth officer at CLS, comments: “It is clear that settlement members are realising the benefits of submitting their cross currency swaps to CLSSettlement, driven partly by policymakers' focus on increasing the adoption of payment versus payment settlement.
“In addition to mitigating settlement risk, firms sending these trades to CLSSettlement benefit from significantly lower funding costs due to the multilateral netting efficiencies CLS provides. On average, just 1 per cent net funding is required to achieve settlement, which frees up cash flow for other business operations."
By using CLSSettlement, participants can mitigate the settlement risk associated with cross currency swaps due to the high value of the initial and final principal exchanges, says CLS.
In addition, as cross currency swap flows are multilaterally netted against other foreign exchange transactions within CLSSettlement, users also benefit from a significant reduction in daily funding requirements.
Speaking on the announcement, Lisa Danino-Lewis, chief growth officer at CLS, comments: “It is clear that settlement members are realising the benefits of submitting their cross currency swaps to CLSSettlement, driven partly by policymakers' focus on increasing the adoption of payment versus payment settlement.
“In addition to mitigating settlement risk, firms sending these trades to CLSSettlement benefit from significantly lower funding costs due to the multilateral netting efficiencies CLS provides. On average, just 1 per cent net funding is required to achieve settlement, which frees up cash flow for other business operations."
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