European Stability Mechanism selects Eurex Clearing for voluntary clearing of interest rate swaps
The European Stability Mechanism (ESM) has selected Eurex Clearing to voluntarily clear over-the-counter (OTC) interest rate swaps.
By voluntarily committing to CCP clearing, the ESM’s decision contributes to the objectives of EMIR 3.0 and significantly strengthens Europe’s attractiveness, actively supports the development of a robust and resilient clearing ecosystem in Europe and reduces the EU’s dependence on third country clearing houses.
The ESM provides financial assistance to euro area member states experiencing or threatened with severe financing difficulties, thereby safeguarding financial stability in the eurozone. Interest rate swaps are essential instruments for the ESM to manage its financial obligations and ensure cost-effective lending programs.
By clearing its OTC IRS through an EU clearing house, ESM is taking proactive steps to mitigate counterparty risk, reduce risk management costs and further streamline its operational processes. Its decision in line with the EU Commission’s call to public sector entities in EMIR 3.0 will increase the scope of active players and strengthen the EU based clearing environment.
“We are delighted to welcome the ESM as a clearing member,” said Stephan Leithner, CEO of Deutsche Börse AG. “The ESM’s decision to CCP clear interest rate swaps in the EU is a key contribution to reinforcing financial stability and strategic autonomy within the region – a significant step forward for the entire European market. This underscores Eurex Clearing’s vital role in providing secure and efficient clearing services, and positions us for continued growth and innovation within the evolving European financial landscape.”
“This move is a message of trust in the European financial system and demonstrates the ESM’s commitment to innovation and progress. It also supports the broader objective of deepening European capital markets, fostering economic growth and competitiveness,” ESM Managing Director Pierre Gramegna said. “I am very pleased to have Eurex as the ESM’s partner in this journey.”
