Eurex and LCH.Clearnet seek OK for inflation swaps

Abstract

A new front is set to open in the swaps clearing battle between LCH.Clearnet and Eurex, with both central counterparties on track to launch clearing for inflation swaps early next year, pending regulatory approval. That will come as a relief to market participants that are already struggling with the increased capital and funding burdens the product attracts, and that would face extra margin costs if interest rate swaps were subject to a clearing mandate while often-offsetting inflation swaps remained in the non-cleared world.