European banks stop clearing Korean won swaps at KRX
Uncertainty over whether Esma will recognise KRX’s OTC clearing house; industry players say the exchange has to improve its risk management
Doubts over European recognition of KRX's over-the-counter derivatives clearing house and the robustness of its risk management procedures are forcing European banks to reduce trading of Korean won interest rate swaps or move to non-standard products.
Korea launched its OTC clearing operation three months ago to meet a regulator-imposed deadline of June – one which was deemed too soon by many market participants. The decision by Korean regulators to mandate won interest rate swaps out to 10
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