IntercontinentalExchange (ICE) has expanded clearing service for sovereign credit default swaps (CDS) with the addition of six European countries, as the Eurozone continues to teeter on the possibility of another financial crisis.
ICE has added Portugal, Ireland, Italy and Spain to its suite of sovereign single name CDS for its U.S. clearing house, ICE Clear Credit, while also adding Austria and Belgium for London-based ICE Clear Europe.
With these countries, ICE Clear Credit clears CDS instruments on 11 sovereign names, and ICE Clear Europe with six names.
Regulators are keen to push swaps through clearing houses to reduce the counterparty risk associated with privately negotiated derivatives contracts.
The possibility of Greece leaving the Eurozone and defaulting on its debts has raised concerns of contagion for the rest of Europe, particularly Italy which is tied to Greece (and is Europe’s second most-indebted country). Therefore the expansion of ICE’s clearing offering could come at a crucial time.
ICE Adds Portugal, Italy And Spain Sovereign CDS Clearing
IntercontinentalExchange (ICE) has expanded clearing service for sovereign credit default swaps (CDS) with the addition of six European countries, as the Eurozone continues to teeter on the possibility of another financial crisis.