SwapClear Compresses over $1 Quadrillion of Cleared Derivatives
LCH.com — LCH, the global clearing house, 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.”
The association supports the CFTC’s effort to establish new clearing mandates.
Centrally cleared and settled transactions have been in continuously increasing demand.
LCH SwapAgent registered over 10,000 trades in 2021, a five fold increase.
Overall trading volumes across all products fell 8% from 2020.
Klimpel won Excellence in Human Clearing at Markets Media Group’s 2021 Women in Finance (U.S.) Awards.