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The nominal value of European government bond and repo trades cleared by the LCH.Clearnet group (LCH.Clearnet) in 2010 increased by 28% year on year, a record fuelled by increased demand as banks seek to manage their counterparty risk exposures. 19 new participants signed up to clear their fixed income business through LCH.Clearnet, taking the total to 70 and resulting in an increased proportion of inter-bank repo trades being cleared.
The total nominal value of fixed income trades cleared by LCH.Clearnet during 2010 reached €137 trillion, equating to over €500 billion in nominal value cleared daily.
Also in 2010, LCH.Clearnet launched the first clearing service for Spanish government bonds and repos. A notional value close to €700 billion was cleared during the year.
John Burke, director and head of fixed income, LCH.Clearnet said; “At times of market stress, clearing becomes increasingly important. These impressive volumes show that maintaining liquidity and managing collateral are top of the list of priorities for banks. We look forward to continuing to develop and enhance our fixed income business during 2011.”
For 12 years, LCH.Clearnet has worked closely with its members to develop innovative clearing solutions for the fixed income markets, generating significant efficiencies in the management of collateral in the euro and sterling repo markets. Europe’s largest clearer of bonds and repos, LCH.Clearnet provides services across 13 government markets.
