CLS, a financial market infrastructure group delivering settlement, processing and data solutions, has announced that Barclays Bank has officially gone live on its Cross Currency Swaps (CCS) service.
Michael Pollak, Head of Cross Currency Trading, Barclays Bank, said: “As markets continue to navigate an uncertain period, being able to mitigate FX settlement risk via CLS’s CCS service is a vital part of our risk management practices. Through multilateral netting, we can also optimize our liquidity, reduce our funding requirements and remove friction from the market’s infrastructure. We look forward to the continued benefits the service will bring to our operations and the wider industry.”
The CCS service – an extension of CLS’s unique payment-versus-payment (PvP) settlement service, CLSSettlement – mitigates settlement risk for CCS transactions. By integrating CCS flows into CLSSettlement, the service allows for multilateral netting against all other FX transactions, providing substantial liquidity optimization benefits as well as reducing daily funding requirements for clients.
As public policy efforts to mitigate settlement risk have increased, CLS’s CCS service has seen a notable rise in activity. Values of CCS submitted to CLSSettlement are up 48% year-on-year in 2023, highlighting the industry’s support for the service.
Lisa Danino-Lewis, Chief Growth Officer at CLS, said: “Barclays Bank going live on our CCS service is a positive step in our continual work toward making the global FX market more resilient and efficient. The adoption of our CCS service by Barclays, one of the world’s premier banking institutions, demonstrates the value and trust placed in our risk mitigation and liquidity management solutions by the industry. The growing number of institutions, as well as growing volumes on the platform, underlines the industry’s commitment towards minimizing settlement risk in the FX market.”
The CCS service supports FX market participants’ adherence to Principle 35 of the FX Global Code.1 It also helps market participants respond to recent public policy efforts to mitigate settlement risk, such as the European Central Bank’s new guidance on how banks should mitigate FX settlement risk and the Financial Stability Board’s Roadmap to Enhance Cross-Border Payments.
