LCH RepoClear SA announces that its services for RepoClear Euro debt. Such as specials and general collateral deals, have been combined with €GCPlus, a clearing service for general collateral tri-party repos.
LCH SA has recently merged two services, €GCPlus and RepoClear, in order to provide members with easier access to secured liquidity and improved collateral management. This combination of services creates a larger liquidity pool and by doing so unlocks new netting opportunities for members. Additionally, this merger allows for fewer costs. Such as a single default fund instead of two, and offers just one set of margin calls and reports. Banks will benefit from a Sponsored Clearing model. Which relieves pressure on resource management due to the growing issuance of government debt.
Starting from June 2023, members of pension schemes in the European Union have been needing to make use of clearing systems for interest rate swaps. This in turn leads to the need for more collateral to be exchanged, as variation margin in the form of cash needs to be posted with a Central Counterparty. To make this easier, RepoClear SA provides access to a shared pool of funds that can be used for this purpose.
COO RepoClear, Collateral and Liquidity Management (CaLM), Emmanuel Rolland, said:
We are delighted to build on our long-standing collaboration with Euroclear and Banque de France, to offer the sell side and buy side alternative access to general collateral liquidity and the world’s largest Euro cleared pool with enhanced collateral management capabilities.
The merger of our two services means that financial institutions will benefit from even greater netting opportunities, reduced margin requirements, and harmonised reporting and operational processes. The benefits of access to cleared liquidity and robust risk management have never been more apparent given recent market events and we look forward to working with financial institutions as they look to RepoClear for that support.
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