Skip to content
Master Your Financial Future — Master Your Money — Finance in the Cloud Age — Financial Tech Innovations

Bank of America joins CLS to enhance cross-currency swap security

A major leap for FX safety: Bank of America adopts CLS's automated system to slash settlement risks. Will this reshape global currency trading?

,   and  Administrator
1 min read
The image shows an international banking corporation ten taiels banknote from 1918. It has a green...
The image shows an international banking corporation ten taiels banknote from 1918. It has a green background with the words "International Banking Corporation" written in bold black font at the top, followed by the number "10" in a smaller font. Below this is a picture of a globe with a red and white checkered pattern. The bottom of the note has a signature in black ink.

Bank of America joins CLS to enhance cross-currency swap security

CLS has expanded its Cross Currency Swaps (CCS) service with Bank of America now live on the platform. The move marks a step forward in cutting risk across the foreign exchange (FX) market. Automated processing and multilateral netting are key features of the updated system. The new infrastructure connects CLS’s CCS service with OSTTRA MarkitWire, enabling smoother post-trade operations. By automating processes and offering multilateral netting, the system aims to lower funding demands and boost efficiency for banks and financial firms.

Bank of America can now settle cross-currency swap principal exchanges through CLSSettlement’s payment-versus-payment (PvP) mechanism. This method ensures both sides of a trade settle at the same time, reducing the chance of one party failing to meet its obligations. Carlos Fernandez-Aller, co-head of Global FICC Macro at Bank of America, highlighted the importance of cutting unsecured settlement risk. His comments align with broader industry efforts to strengthen market stability. Lisa Danino-Lewis, Chief Growth Officer at CLS, also stressed the need for risk mitigation, especially as FX trading volumes hit record highs. Regulators and policymakers have been pushing for wider use of PvP settlement to lower systemic risk in FX markets. The push comes as average daily FX turnover reached around $9.6 trillion in April 2025, a 28% jump from 2022 figures.

The integration of Bank of America into CLS’s CCS service reflects ongoing efforts to improve security in FX trading. With automated processing and PvP settlement, the system aims to reduce funding costs and operational risks. The changes come as trading volumes rise and regulators seek more robust market safeguards.

Read also:

Related

Latest