European clearing house LCH.Clearnet is planning to launch a clearing service for credit default swaps (CDS) in the eurozone by December 2009. The service will be managed by LCH.Clearnet SA, the firm’s Paris division.
LCH’s plans are a response to regulator and market demand for CDS clearing in the eurozone, the company said. “Clearing is a highly effective means of reducing counterparty risk in any market and there is a real appetite within the eurozone for a CDS clearing service,” said Christophe Hémon, chief executive of LCH.Clearnet SA, in a statement.
LCH.Clearnet currently clears around 50% of the $140 trillion global interbank interest rate swap market. In December 2008, the London division of the group became the first clearing house to launch CDS clearing for European indices in association with derivatives exchange Liffe.