Graph 1  Click to view larger  4  BIS central bankers’ speeches  Both pricing and regulatory factors have contributed to this. Of course, the anticipation of a mandate being introduced has been an important factor. But more generally over time, a material pricing differential has emerged between cleared and non-cleared transactions, which has reinforced this trend.
In the case of Australian dollar-denominated interest rate derivatives, the acceleration of Australian banks’ transition to clearing has contributed to an increase in total notional cleared to more than $ trillion (Graph 2). 5 Since the regulators issued their recommendation, CME Clearing (CME) has also become licensed in Australia, although it currently has no direct Australian participants.