MPS Capital Services announced that it signed an agreement to clear interest rate swaps on LCH.Clearnet’s SwapClear service through Barclays Capital.
Under the agreement, MPS Capital said more than $200 billion of its interest rate swaps have been back-loaded. The moves were made in response to the widely anticipated European regulatory reform towards central clearing, the firm added.
By back-loading and clearing future interest rate swap transactions, MPS Capital said it will benefit from reduced counterparty risk, potential capital relief, a more effective collateral management process and lower overall operation risks.
“This is an important step for the OTC market and the buy-side community as a whole and reflects the prevailing impetus to reduce systemic risk through central clearing,” Michael Davie, the head of LCH.Clearnet’s SwapClear service said in a statement.
As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio