TriOptima and SwapClear have eliminated 20 percent of inter-dealer notional outstanding in cleared Canadian dollar (CAD) interest rate swaps (IRS).
The post-trade service providers saw 18 clearing participants cut CAD $1.6 trillion (US $1.23 trillion) in LCH.Clearnet’s SwapClear.
“Our last two cycles have eliminated CAD $3.3 trillion (US $2.55 trillions) in outstanding CAD IRS in SwapClear, contributing to a further reduction in systemic risk for the market and regulatory capital for individual institutions,” said Michael Modlock, head of triReduce North America.
“We continue to see greater compression possibilities as unlinking trades in the central counterparty provides a larger pool of eligible swaps for compression.”
As clearinghouses unlink trades from the original counterparty to create ‘unlinked trades’, dependency on the participation of other clearing members is reduced, resulting in a larger pool of trades eligible for compression, according to TriOptima.
TriOptima and LCH.Clearnet’s SwapClear currently offer compression cycles for 13 currencies.
