The European Investment Bank (EIB), which exists as the lending arm of the EU, is the first supranational institution to become a direct clearing member at LCH SA’s RepoClear service.
RepoClear is the UK clearinghouse’s French service offering clearing for bond and repo trades across 13 of the largest European markets, including France, Belgium Germany, Spain and Italy.
By joining the service, EIB is able to directly access €GCPlus, the LCH’s tri-party basket repo clearing service that enables members to pool general collateral trades of highly-rated sovereign debt and agency issuers, as well as other investment-grade bonds that meet eligibility criteria from two baskets of debt.
According to LCH, clearing €GCPlus allows members to increase their capital and operational efficiencies and better manage their euro cash liquidity.
For LCH SA, EIB will act as “an important liquidity provider,” says its CEO Christophe Hémon.
Bertrand de Mazières, director general, EIB, states adds: “Increasing financial stability and ensuring sustainability is at the core concerns of EIB’s finance directorate. Liquidity risk resilience is an integral element to this.
“As a result, we’re pleased to have become a member of LCH SA to ensure access and participation in this key area of the fixed income and repo market.”
LCH, which is owned by the London Stock Exchange, offers clearing services across asset classes including over-the-counter and listed rates, fixed income, cash equities and equity derivatives, among others.
LCH also serves the non-cleared derivatives market through LCH SwapAgent, a new service which aims to extend the efficiencies and infrastructure of clearing to the market, without acting as a central counterparty.
