Barclays Bank goes live on CLS’s Cross Currency Swaps service

By Gloria Methri

The CLS group, or Continuous Linked Settlement Group, has announced that Barclays Investment Bank will go live on its Cross Currency Swap service.

CLS is a financial market infrastructure group that operates a global central multicurrency cash settlement system for foreign exchange transactions. It was launched in 2002 to eliminate settlement risk in FX transactions by using a “payment versus payment” method that simultaneously exchanges currency values through CLS Bank International.

By integrating Cross Currency Swap flows, the CLSSettlement service allows for multilateral netting against all other FX transactions. This provides substantial liquidity optimization benefits as well as reducing daily funding requirements for clients.

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.”

Michael Pollak, Head of Cross Currency Trading, Barclays Bank PLC, added, “As markets continue to navigate an uncertain period, mitigated 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 supports FX market participants’ adherence to Principle 35 of the FX Global Code. 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.