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BNP Paribas to set up derivatives clearing house

BNP Paribas is to create a standalone derivatives clearing business, aiming to grab market share and boost earnings at its fixed income business as new regulations put pressure on its resources and margins. The bank will shift its over-the-counter client clearing and foreign exchange prime brokerage operations alongside its listed derivatives clearing business, it announced as part of its investor day in Paris. The businesses had previously sat in BNP’s Capital Markets and Securities Services units respectively. Its move comes as banks face restructuring some of their most lucrative business streams as new global regulations begin to bite. Reform of over-the-counter derivatives market, banking reforms and tougher global capital requirements are making it more expensive for banks to trade fixed income. The rules are set to make it more difficult for banks to hold large inventories and make markets in certain types of bond.

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