KfW joins LCH SwapAgent
28 March 2023 UK
Image: peshkova/stock.adobe.com
KfW has joined uncleared derivatives market service LCH SwapAgent and has processed the first Transport Currency trade with its counterparties Bank of America, Commerzbank, Danske Bank and Santander.
KfW uses bilateral derivative transactions to hedge against interest rate and currency risk, and is one of the largest end-users of cross-currency swaps globally.
The Transport Currency system allows users to use euros for daily margin payments on cross-currency swaps. Developed between LCH SwapAgent, its users and KfW, Transport Currency trades standardise discounting and valuations and reduce risk.
Nathan Ondyak, global head of LCH SwapAgent, says: 鈥淲e are pleased to have worked with KfW on this new development for derivatives markets, and to welcome them as a member of LCH SwapAgent. Transport Currency is a unique proposition for derivatives markets that we look forward to developing further in collaboration with market participants.
Stephan Blanke, head of derivatives for KfW, comments: 鈥淜fW's funding and hedging activity is based on a broad diversification of business partners. Thus, it makes sense for us to support LCH SwapAgent in increasing liquidity and improving market access for all users of derivatives. It is also a valuable tool for KfW from a risk and pricing perspective."
KfW uses bilateral derivative transactions to hedge against interest rate and currency risk, and is one of the largest end-users of cross-currency swaps globally.
The Transport Currency system allows users to use euros for daily margin payments on cross-currency swaps. Developed between LCH SwapAgent, its users and KfW, Transport Currency trades standardise discounting and valuations and reduce risk.
Nathan Ondyak, global head of LCH SwapAgent, says: 鈥淲e are pleased to have worked with KfW on this new development for derivatives markets, and to welcome them as a member of LCH SwapAgent. Transport Currency is a unique proposition for derivatives markets that we look forward to developing further in collaboration with market participants.
Stephan Blanke, head of derivatives for KfW, comments: 鈥淜fW's funding and hedging activity is based on a broad diversification of business partners. Thus, it makes sense for us to support LCH SwapAgent in increasing liquidity and improving market access for all users of derivatives. It is also a valuable tool for KfW from a risk and pricing perspective."
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