GERMANY: ESM Selects Eurex Clearing for Voluntary Clearing of Interest Rate Swaps

Friday May 16 2025

On 15^th May 2025, Eurex Clearing announced that it has been chosen by the European Stability Mechanism (ESM) to voluntarily clear over-the-counter (OTC) interest rate swaps, demonstrating a clear commitment to strengthening the EU financial ecosystem. This decision recognizes the critical role of central clearing in promoting financial stability and actively supports Eurex Clearing’s efforts to enhance the strong alternative liquidity pool within the EU, thereby advancing the European sovereignty agenda.

By voluntarily committing to Central Counter Party (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.

This step also contributes to the broader objectives of the EU’s Savings and Investment Union by increasing market efficiency and transparency. Central clearing helps to create a more attractive investment environment and contributes to wider and more integrated European capital markets. The move strengthens Eurex Clearing’s position as a central pillar of the European clearing landscape and reinforces its commitment to promoting financial stability and market integrity.

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