SwapClear, the over-the-counter interest rate swap clearing
service from LCH.Clearnet, announced in mid-October that it had
processed over $1tr of overnight index swaps (OIS) in the 11
week period since it began handling those contracts in
The clearing service estimates SwapClear now processes 64%
of the global interbank interest rate swap market, after
continued growth this year. As of September 30 it had $202tr of
outstanding notional trade sides under management.
OIS are fixed/floating interest rate swaps. The floating
part is pegged to an index of a daily overnight rate such as
the Sterling Overnight Interbank Average (Sonia) or the Euro
Overnight Interbank Average (Eonia).
The global financial crisis has reduced swap market
participants’ confidence about trading OTC without
Many felt the value of a central counterparty was
demonstrated in the aftermath of Lehman Brothers’
collapse, when LCH.Clearnet dealt with $9tr of
Lehman’s interest rate swap exposure.
SwapClear’s success was a key driver behind the
takeover interest in LCH.Clearnet (see page 14).
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