CLS Adds Three to Cross-Currency Swap Service
Posted by Colin Lambert. Last updated: September 8, 2023
CLS says that it has added three of its settlement members to its cross-currency swaps (CCS) settlement service, naming two of the banks as Barclays and Danske Bank.
CLS says the three are joining a growing community of settlement members on the service, which has witnessed growth in recent months, with a 38% year-on-year increase in the values of CCS submitted to CLS Settlement in the first half of 2023.
The CCS service is an extension of CLS’s payment-versus-payment (PvP) settlement service, CLS Settlement and allows settlement members to send their CCS into the service. CCS flows are multilaterally netted against all other FX transactions in CLS Settlement, resulting, CLS says, in a “significant reduction in daily funding requirements for clients and considerable liquidity optimisation benefits across the industry”.
The utility adds that increasing CCS volumes to CLS Settlement bolsters the efforts of policymakers and regulators to promote widespread adoption of PvP as a means of reducing settlement risk.
“[The banks] decision to join our platform is a testament to the risk mitigation and liquidity and operational efficiencies provided by the service, and it underscores our clients’ continued commitment to further mitigate settlement risk,” says Lisa Danino-Lewis, chief growth officer, CLS
Jeppe Østerby Thomsen, global head of STIR trading, Danske Bank adds, “As a leading bank in the Scandinavian region, it is important for Danske Bank to have access to post-trade solutions that deliver risk mitigation and greater cost efficiencies. We are confident that CLS’s CCS service will help us achieve greater efficiency and transparency in our FX operations.”