12.02.2020

Citi Joins American Financial Exchange

12.02.2020
Shanny Basar
Basel Committee Consults on Interest-Rate Risk

AFX has formed a strategic alliance with Citi in which the Bank will join the American Financial Exchange (AFX). Citi will also engage in position hedging using AMERIBOR® futures and provide market-making in AMERIBOR® interest rate swaps.

AFX is an electronic exchange for direct lending and borrowing for American banks and financial institutions. AFX also facilitates the determination of a market-based interest rate benchmark called the American Interbank Offered Rate (AMERIBOR®). AMERIBOR® has been independently reviewed and reaffirmed to adhere to all nineteen (19) principles set forth by the International Organization of Securities Commission (IOSCO) for Financial Benchmarks.

“This is a landmark moment for AFX and AMERIBOR®. An institution such as Citi engaging with AFX and its support for AMERIBOR® sends a strong message to the marketplace that AMERIBOR® is here to serve an important role in the development of robust benchmark alternatives,” said Dr. Richard L. Sandor, AFX’s chairman and CEO.

“Supporting our clients through their transition away from LIBOR is a priority for Citi,” said Geoffrey Weber, Head of Americas Linear Rates Trading at Citi. “Through our strategic partnership with AFX, we believe we can enhance this transition for our clients, especially community and regional banks, who consider the AMERIBOR® index representative of their true cost of funding. As with LIBOR and SOFR products, we are committed to be the market leader in AMERIBOR® products by offering deep liquidity in futures and interest-rate swaps.”

“Greater use of AMERIBOR® by all segments of the U.S. banking sector, and especially an institution like Citibank, will significantly speed up its adoption in all asset classes,” said Phil Green, chairman and CEO of Cullen/Frost Bankers, Inc., parent company of Frost Bank in San Antonio, Texas. “It will have important repercussions for deeper and liquid markets which can greatly benefit a smooth transition away from Libor. Frost Bank was a founder of AFX in 2015 and was a counterparty to the first transaction on the exchange. We congratulate AFX on this milestone.”

Source: AFX

Related articles

  1. The consortium is creating the first open market electronic trading platform for syndicated loans and CLOs.

  2. MiFID II to Boost Automation

    The collaboration achieved a 76% reduction in email traffic for operational processes for trades.

  3. BNP Paribas Asset Management launched its first European ESG ETF Barometer survey.

  4. By Greta Zhou and Andy Cheung, APAC AES, Credit Suisse

  5. OCC said trading revenue was 47.8% more than in the previous quarter.