Banco Sabadell first bank in Spain to sign with Europe’s largest derivatives exchange the German clearing house Eurex

24-7-2013 — /EuropaWire/ — Banco Sabadell has become the first Spanish bank to sign up with the German clearing house Eurex, the largest derivatives exchange in Europe. With this move, the bank is one step ahead of the entry into force of the new regulation approved by the European Parliament in 2012 that over the next year will make the reporting of OTC derivatives transactions through clearing houses compulsory.

Specifically, Banco Sabadell has become a member of EurexOTC IRS Clear, the service for the clearing of interest rate derivatives, the most commercialised product of these characteristics, after currencies. Interest-rate derivatives are financial instruments for companies whose objective is to cover risks linked to the evolution of interest rates in long-term transactions.

Signing up with a clearing house of this type is one of the measures that will help towards Banco Sabadell customers who buy interest-rate derivatives being able to do so within a better regulated and more transparent framework. “These financial instruments used to be contracted on a bilateral basis without any intervention by an exchange or clearing house. Now, clearing an operation through a clearing house such as Eurex implies, at the very least, benefits in terms of liquidity, counterparty risk and consumption of capital”, points out Jaume Balaguer, who is responsible for these procedures at the Operating Optimisation Department of Banco Sabadell.

Based in Frankfurt, Eurex is one of the largest derivatives exchanges in the world. The German clearing house settles over 6.7 million derivative product transactions per day and has a licence in 16 European countries.

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