Wells Fargo joins LCH.Clearnet SwapClear

According to Adrian Kayari, Wells Fargo's head of Interest Rate Derivative Trading, "Interest rate swaps are an integral part of our business and clearing will enable us to mitigate counterparty risk and benefit from operational efficiencies. We look forward to leveraging the many facets of SwapClear's services."

Michael Davie, CEO, SwapClear said; "Wells Fargo is a leading US financial services company and we are delighted they are joining SwapClear. We will continue to grow our US presence and deliver to US clients the benefits of a local service with the operational and risk efficiencies of a global offering."

Established more than 11 years ago, SwapClear is the only truly global clearing service for IRS. Since launch in 1999, it has cleared over 1.5 million OTC IRS trades. SwapClear currently has 53 clearing members. The 950,000 trades in SwapClear have an aggregate notional principal amount of over $295 trillion, with a further $41.5 trillion of cleared transactions removed through multilateral trade compression. It is the only OTC clearing service to have successfully handled a significant OTC default, when it resolved Lehman Brothers' $9 trillion IRS default in 2008. In that instance, SwapClear's default management process ensured that more than 66,000 trades in 5 currencies were hedged and auctioned to other clearing members. SwapClear's process resulted in no loss to any market participants.

In June 2010, following extensive industry consultation, LCH.Clearnet became the first derivatives clearing house in the world to use overnight index swap (OIS) rate curves to discount IRS. This important step not only ensured the highest standards of risk management within a CCP; it has also increased certainty and transparency in the interest rate swap market more generally.