CME Group begins clearing Euro-denominated interest rates swaps, announces new IRS clearing record

CME Group begins clearing Euro-denominated interest rates swaps, announces new IRS clearing record

19/10/2011

CME Group, the world's leading and most diverse derivatives marketplace, today announced that it has begun clearing Euro-denominated interest rate swaps (IRS).  The company also announced that it set a new daily record for IRS clearing on October 18, 2011, with $8 billion in U. S. customer volume cleared. 

The new CME Group Euro-denominated clearing offering expands the company's existing U.S. dollar-denominated interest rate swaps clearing service, providing over-the counter risk management opportunities for interest rate maturities in both currencies extending to 50 years. 

"We continue to be very focused on voluntary client clearing and, as a result, are expanding our offering to satisfy specific customer demand," said Laurent Paulhac, CME Group Managing Director, OTC Products and Services.  "Adding Euro-denominated swaps further enhances our clearing offering, allowing us to satisfy a user base looking for non-dollar based products, as well as to complement our newly launched Euribor futures, enabling capital efficiencies for market participants as open interest grows." 

"Citi is pleased to clear one of the first EUR-denominated interest rate swaps through CME Clearing," said Christopher Perkins, Global Head of Derivatives Clearing at Citi.  "Citi is strategically committed to supporting our clients' OTC derivatives clearing needs, and will continue to work with CME Clearing to further expand its eligible product set going forward." 

CME Group also announced that it will further expand its IRS clearing service by year-end, with the addition of British pound, Japanese yen, Swiss franc and Canadian dollar-denominated IRS.  According to data from the Bank for International Settlements, these six currencies account for 94 percent of the vanilla IRS market. 

To date since launching these OTC clearing services, CME Group has cleared nearly $67.3 billion in over-the-counter customer volume, including $58 billion in IRS and $9.3 billion in credit default swaps(CDS), making CME Group the leading OTC clearing service by U.S. customer volume.  As of October 14, IRS open interest stands at $50 billion, with CDS at $6 billion. 

"Morgan Stanley is pleased to partner with CME Clearing and our clients to participate actively in the voluntary adoption phase of OTC clearing," said Andrew Huszar, U.S. Head of OTC Clearing at Morgan Stanley. "Early usage of clearing allows market participants to gain comfort with the system infrastructure, develop operational readiness and accrue the benefits of clearing.  Additionally, this increase in volume critically facilitates market readiness in advance of the regulatory clearing mandates."

To learn more about CME Group's OTC clearing offering, visit our resources on IRS and CDS.