SwapsWire, a company that provides trade capture and confirmation for interest rate swaps, plans to expand the range of products it can process to include credit-default swaps and equity derivatives. The move could dramatically reduce the number of trades with errors, such as the wrong reference entity, and therefore reduce operational risk, according to traders.
"The operational costs of running the swaps desk have reduced since using SwapsWire," according to Michael Davie, head of interest-rate swaps trading at JPMorgan in London. It reduces costs by increasing the certainty and accuracy of the positions, reducing the number of staffers a firm needs to process positions and may even reduce internal operational capital charges.
SwapsWire has become the default mechanism for processing interest rate swaps, with over USD1 trillion (notional) being traded through the system in its first four months, and would likely become the default for credit and equity derivatives, according to traders at major derivatives houses. Henry Hunter, chief marketing officer in London, said it will likely add credit-default swaps in the third quarter.
