CME working with Fannie, Freddie on swaps

Exchange operator CME Group Inc (CME.O) is working with mortgage lending giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N) to design a clearing facility for the $414 trillion global market for interest-rate swaps.

"We have been working with them to help structure our cleared interest-rate swap offering," CME CEO Craig Donohue said on Tuesday at the Reuters Global Exchanges and Trading Summit in New York. "I imagine that we, among others, will be competing to try to win business from them as we introduce our interest-rate swaps clearing solution."

Fannie Mae and Freddie Mac, which were seized by the U.S. government in September 2008, will start moving their swaps to centralized clearing within months, their federal regulator said earlier in March. (more)