TRADE & FINANCE 29
One of the most recent examples of innovative benchmarks is the STOXX GC Pooling index family that provides investors with a money market rate based on reliable market data
grown in recent years to a volume of up to 180 billion euros with on average 3,000 transactions on the platform . More than 120 market participants from 14 countries are connected to the platform . The secured money market is attracting volume from the unsecured money market as it addresses key concerns raised during the financial crisis . Firstly , trading on the GC Pooling market takes place via a central counterparty ( CCP ), i . e . each participant is only trading with the CCP , and thus counterparty risks that were one reason for the breakdown of interbank trading during the financial crisis are mitigated . Moreover , the CCP nets all positions in the settlement process and thus helps reduce transaction costs . The obligatory collateralization of each position that is centrally and automatically managed also reduces credit risks . There are three different baskets of securities eligible for collateralization , two of them reflecting requirements of the European Central Bank ( ECB ), which can also be used for refinancing directly with the central bank .
In late 2014 , the first financial instruments based on the STOXX ® GC Pooling EUR Deferred Funding Rate will become available . A new futures contract listed on Eurex will support the risk management of banks and other market participants . This is a good example of how independent index providers can create innovative solutions , which meet high regulatory standards and investors needs in a business environment altered forever by the financial crisis . ■