CCPs confront cleared swap basis threat

From Japan to Mexico, CCPs are trying to avoid repeat of CME-LCH price disparity

risk-0815-lead-story-2-mind-the-gap-app-shutterstock-205287112-app
Some clearing houses worry a basis could appear for products they clear, potentially driving business away

Who's next? It's the obvious question when a company falls victim to pressures that apply across its sector.

So, when it became more expensive to trade a pay-fixed US dollar interest rate swap that would clear at CME Group – and relatively cheaper to execute the same trade if it was going to LCH.Clearnet's SwapClear – it was not just the two clearing houses and their customers that started fretting.

In theory, a price difference could emerge for any product cleared at two or more central

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here