$114 trillion savings from triReduce compression cycles
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$114 trillion savings from triReduce compression cycles 06 June 2014London Reporter: Stephen Durham
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TriOptima and LCH.Clearnet members have eliminated $114 trillion in notional principal since December 2013, thanks to the resumption of triReduce compression cycles within LCH.Clearnet’s SwapClear service.
This brings the cumulative total of notional compressed by TriOptima and SwapClear to $302 trillion.
Lowering gross notional exposure contributes to bringing an institution’s leverage ratio in line with regulatory expectations. Trade compression cycles help ensure post-trade efficiency; and running regular cycles in a range of currencies reduces both the gross notional and the number of outstanding over-the-counter (OTC) derivative transactions in the clearinghouse.
Daniel Maguire, global head of SwapClear, commented: “We began providing the service in 2009 and, since then, new capital requirements have brought even greater incentives for banks to reduce the number of trades on their books. We look forward to continuing to reduce notional outstanding and drive market efficiencies through regular compression cycles.”
Since the launch of triReduce in 2003, OTC derivative market participants have eliminated more than $476 trillion in notional principal outstanding using the service to terminate both cleared and uncleared trades across a broad spectrum of products.
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