Fannie Mae and Freddie Mac are expected to start central clearing their interest rate swaps this year, according to an official of the Federal Housing Finance Agency, which oversees the two government-sponsored entities. Martha Tirinnanzi, chairman of the agency’s clearinghouse working group, said roughly three-quarters of the two lenders’ USD3 trillion swaps portfolio—between USD700 million and USD800 million—is standardized and therefore qualifies for central clearing. Tirinnanzi said Fannie Mae and Freddie Mac have tested swap clearing with Nasdaq OMX Group, CME Group and LCH.Clearnet but has yet to choose one. She said the decision to clear is “a signal to sell-side that this market has changed.”
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