Shanghai Clearing House Expands Credit Derivatives Clearing, Catalyzing Green Finance
The Shanghai Clearing House (SCH) has expanded its credit derivatives clearing services by adding new partners—China Construction Bank, Deutsche Bank China, and Galaxy Securities. This move enhances the market ecosystem while also introducing clearing services for credit derivatives linked to green bonds. Key institutions such as Bank of Communications, Shanghai Pudong Development Bank, and Deutsche Bank China are contributing to green finance and other strategic sectors.
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Enhancing Credit Risk Management for the Real Economy
ONE
SCH aims to support the real economy by improving credit risk dispersion and expanding risk management tools. Its efficient, regulated clearing services for credit derivatives, including standardized CDS, reduce risk capital usage and create a self-sustaining risk management cycle that boosts market activity. SCH also offers customized bilateral clearing for interbank CDS transactions, optimizing settlement, reference valuations, and collateral management.
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Diverse Market Participants Drive Innovation
TWO
The development of interbank credit derivatives is driven by various market participants, including state-owned banks, joint-stock banks, foreign banks, and securities firms. These players are enhancing price discovery, risk management, and market innovation. For example, China Construction Bank advances risk management, Bank of Communications supports green finance and corporate financing, and Shanghai Pudong Development Bank is actively developing new products. Deutsche Bank China and Galaxy Securities are also contributing to market growth with tailored financial solutions.
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Future Outlook: Supporting Sustainable Growth
THREE
SCH will continue to leverage its infrastructure to enhance credit derivatives clearing services. In partnership with the People's Bank of China and CFETS, SCH plans to expand its product offerings, optimize operations, and simplify the clearing process, enabling greater participation and promoting high-quality economic growth.
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