Securities Finance Industry News | CLS Records Continued Growth in Currency Swap Settled Values
CLS, the financial market infrastructure company, saw continued growth in settled values of cross-currency swaps subject to CLSSettlement, with a 27% year-on-year increase.
By using CLSSettlement, participants can mitigate the settlement risk associated with cross-currency swaps due to the high value of initial and final principal swaps, CLS explains.
Additionally, as currency swap flows are multilaterally netted with other FX transactions within CLSSettlement, users also benefit from a significant reduction in daily funding requirements.
Speaking on the announcement, Lisa Danino-Lewis, Director of Growth at CLS, comments: “It’s clear that settlement members are realizing the benefits of submitting their cross-currency swaps to CLSSettlement, in part thanks to the focus put by policy makers on increasing payment adoption. against payment settlement.
“In addition to mitigating settlement risk, companies that send these transactions to CLSSettlement benefit from significantly lower funding costs due to the efficiency of multilateral netting provided by CLS. On average, only 1% of net funding is necessary to reach a settlement, which frees up cash flow for other business operations.