FOi - Futures and Options Intelligence

Fannie and Freddie to clear swapsNationalised US lenders Fannie Mae and Freddie Mac will clear a large number of the swaps still on their books in coming months, even if the US financial reform bill fails to clear Congress, Dow Jones Newswires has reported. Martha Tirinnanzi, head of a clearing workgroup at the US Federal Housing Finance Agency’s office of market risk, was quoted as saying: “If there is no legislation, Fannie Mae and Freddie Mac are still going to go to central clearing.”Each lender is said to hold swaps worth some $700-$800bn, which Tirinnanzi said were largely vanilla instruments and therefore likely to be eligible for clearing. She said both lenders had tested a shadow portfolio of swaps with LCH.Clearnet and the International Derivatives Clearing Group, as well as CME’s nascent (and as yet unnamed) clearing venture.Separately, the Financial Times has reported that the chairman of the Senate Banking...