The largest savings bank in the Baden-Württemberg region, Spk Pforzheim Calw is the first German end-user client to clear its IRS business through a German Landesbank.
Spk Pforzheim Calw expects to backload its entire portfolio by the close of 2012 to take advantage of the benefits of clearing with SwapClear, namely reduced counterparty risk, potential capital relief, and efficient collateral management.
"We strongly believe in the goals outlined by regulators in their effort to reduce systemic risk in the OTC markets. Clearing our IRS transactions demonstrates our commitment to ensure we are prepared well ahead of forthcoming regulatory requirements,” said Andreas Frey, head of controlling/backoffice at Spk Pforzheim Calw.
"This exciting strategic development reinforces our commitment to the German marketplace. Together with LBBW, we are pleased to extend the benefits of clearing, and particularly SwapClear’s global pool of liquidity, to German end-users like Spk Pforzheim Calw,” said Heiko Cassens, director SwapClear for Germany, Nordics and Eastern Europe. "We are seeing an increasing number of German clients adopting centralised clearing and look forward to broadening SwapClear’s reach within the German financial community.”
"We are delighted to be the first German bank to provide Spk Pforzheim Calw with the opportunity to clear its OTC interest rate swaps,” said Ralf Winkelmann, COO financial markets and head of division financial markets sales and corporate finance at LBBW. "Our collaboration with SwapClear has successfully delivered a service that is in line with end-user requirements, and we expect more of our clients to take advantage of the benefits of clearing soon.”
About Sparkasse Pforzheim Calw
Sparkasse Pforzheim Calw is one of the largest savings banks in Germany and the largest in the state of Baden- Württemberg and provides the population, companies, small and medium-sized businesses and the public sector with all types of financial services. On 31 December 2011, it had total assets of nearly EUR 10.3 billion and a business volume (total assets and contingent liabilities) of EUR 12.0 billion. With over 2,000 employees and more than 150 branches Sparkasse Pforzheim Calw is represented throughout Pforzheim, the Enz district and the rural district of Calw.
About Landesbank Baden-Württemberg
Landesbank Baden-Württemberg (LBBW) is both a commercial bank and the central bank of the savings banks in Baden-Württemberg, Saxony and Rhineland-Palatinate. With total assets of EUR 373 billion and around 12,000 employees (as of 31 Dec. 2011), LBBW is one of the largest banks in Germany, and in its core market Baden- Württemberg it is by far the most important one. Its core activities are the private customer business and the business with corporate customers, in particular small and mediumsized enterprises, as well as savings banks. A further focus is placed on real-estate financing as well as the customeroriented capital market business with banks, savings banks and institutional investors. Together with its regional customer banks Baden-Württembergische Bank (BW-Bank), Rheinland-Pfalz Bank and Sachsen Bank, LBBW services more than one million private customers and 25,000 corporate customers in more than 200 branch offices – for many of these customers, they have been the main banker for many years. Specialised subsidiaries such as leasing, factoring, real estate or asset management round out the product and service range of LBBW group.
Established more than 12 years ago, SwapClear is the only truly global clearing service for interest rate swaps. To date, it has cleared more than 1.5 million OTC interest rate swap trades in 17 of the world’s largest currencies, and its membership currently stands at 64. SwapClear has a total notional outstanding of more than $300 trillion, with an additional $126 trillion eliminated through multilateral trade compression using TriOptima’s triReduce service. SwapClear is also the only OTC clearing service to successfully handle a significant OTC interest rate swap default, doing so when it resolved Lehman Brothers’ $9 trillion IRS default in 2008, resulting in no loss to any market participants.
The LCH.Clearnet Group is the leading independent clearing house group, serving major international exchanges and platforms as well as a range of OTC markets. It clears a broad range of asset classes, including securities, exchangetraded derivatives, commodities, energy, freight, interest rate swaps, FX, CDS and euro- and sterling-denominated bonds and repos, and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.
A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When a trade is registered with a clearing house, that clearing house becomes the legal counterparty to the trade, ensuring financial performance of the trading parties; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within these markets.
Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, which assesses a member’s positions and market risk on a daily basis. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times. LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.
LCH.Clearnet Limited is a wholly-owned subsidiary of LCH.Clearnet Group Limited.
Tel: +1 212-513-5608
Sparkasse Pforzheim Calw:
Tel: +49 (0) 7231 99-3103
Tel: +49 (0)711 127-76402