LCH Adds 5 Currencies to its Interest Rate Swaps Offering

LCH, a global clearinghouse, announced this Tuesday that it has expanded the offering of its non-deliverable interest rate swaps to include five additional currencies - Brazilian Real, Chilean Peso, Colombian Peso, Taiwan Dollar, and Thai Baht.

Responding to customer demand, market participants are now able to clear non-deliverable interest rate swaps for the five new currencies, in addition to LCH’s existing offering on non-deliverable interest rate swaps of Chinese Yuan, Indian Rupee and Korean Won.

Since being launched in April of 2018, the company has cleared more than $5.47 trillion of these currencies through SwapClear, the interest rate derivatives clearing arm of LCH. In total, SwapClear processed more than $1 quadrillion in notional and compressed over $773 trillion in 2018, as Finance Magnates reported.

With the launch of the five additional currencies, SwapClear now offers clearing for derivatives across 26 currencies. They also add to the division’s pool of cleared over-the-counter (OTC) Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term.

This gives LCH’s customers increased opportunities to benefit from portfolio margining, counterparty risk reduction and operational efficiencies, the company statement released today said.

Commenting on the new currencies, Cameron Goh, Global Head of Product, Rates, LCH, said: “We’re delighted to be expanding our non-deliverable swaps offering to include these currencies. Our focus continues to be on providing maximum capital and margin efficiencies for the market, and this latest extension is another example of LCH partnering with our customers to extend our cleared product set.”

Top Financial Institutions use LCH to Clear New Products

Already, top-tier financial institutions have taken advantage of LCH’s new offering. According to the statement, Bank of America Merrill Lynch, J.P. Morgan, and Standard Chartered are among the first participants to clear the new products.

“This is an important development for the market, and we are delighted to be among the first members to clear these derivatives at LCH as we continually look to expand the Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term benefits that we provide to our clients,” added Bruno Lettich, Global Head Rates Trading, Standard Chartered Bank.

“This move by LCH to expand the Asian product offering and the inclusion of Latam currencies, extends the significant margin and capital efficiency benefits of LCH’s global liquidity pool,” Lettich continued.