CME Group’s long-awaited move into interest rate swaps clearing finally went live this week, as it began clearing over-the-counter contracts through CME Clearing House.
The Merc has attracted many big dealers: Bank of America Merrill Lynch, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley, Nomura and UBS. Many of them are also users of LCH.Clearnet’s market-leading SwapClear service.
Established 10 years ago, SwapClear houses some $229tr of swaps by notional principal – 40% of the market. In August, the firm hired JP Morgan banker Michael Davie to head the venture. Functionality for buy side clearing was added last December.
CME’s own buy side participants are investment firms Pimco, BlackRock and Citadel, as well as US mortgage agencies Fannie Mae and Freddie Mac.
In February, at the bidding of the US Federal Housing Finance Agency, the two nationalised mortgage...