20 November 2017
visit www.solutions.lexisnexis.com

Credit Suisse drives blockchain project in syndicated loans market

28 September 2016  |  12359 views  |  0 tablet computer 1

Credit Suisse and the R3 blockchain consortium are driving a new initiative to apply distributed ledger technology to overhaul antiquated and costly manual intervention in the $3 trillion global syndicated loans market.

The Swiss bank is working with Synaps Loans, a joint venture created earlier this year through a partnership between smart contract vendor Symbiont and loan settlement platform provider Ipreo, on a proof-of-concept which will run through the end of the year.

Early stage trials among a number of agent banks, service providers and fund managers have already proved the potential of the technology, says Credit Suisse. Participants in the project included R3 consortium members BBVA, Danske Bank, Royal Bank of Scotland, Scotiabank, Société Générale, State Street, US Bank and Wells Fargo. Buy-side firms AllianceBernstein (AB), Eaton Vance Management, KKR and Oak Hill Advisors are also involved in the initiative.

“This project demonstrates the potential for blockchain technology to fundamentally reshape the syndicated loan market and the capital markets more broadly,” says Emmanuel Aidoo, head of the distributed ledger and blockchain effort at Credit Suisse. “This demonstration sets us on a path to increase efficiency and reduce costs, which will benefit banks and clients alike. By connecting a network of agent banks through blockchain, we can achieve faster and more certain settlements in the loan market.”

Settlement periods of 20 business days or more threaten the continued growth of the loan market. Syndicated loans have a record unsettled exposure of more than $70 billion, over twice that of high-yield bonds. For the sell-side, the delays tie up precious capital. For the buy-side, settlement uncertainty confounds cash management and necessitates costly credit lines.

Through Synaps, loan investors have direct access to an authoritative system of record for syndicated loan data. This yields immediate savings by reducing manual reviews, data re-entry and systems reconciliation. In the future, loan data processing can be done exclusively on the distributed ledger, the firm believes, eliminating the cost for each market participant to maintain its own separate lending system.

“There’s been a lot of hype around how distributed ledgers will drive efficiencies in the syndicated loan space,” says Robert Berk, SVP and chief operating officer, US Bank Capital Markets. “We’re excited to prove the technology works with players throughout the loan ecosystem to truly understand its value."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Caitlin Long swaps Morgan Stanley for Symbiont chair

Caitlin Long swaps Morgan Stanley for Symbiont chair

31 August 2016  |  6983 views  |  0 comments | 6 tweets | 4 linkedin
Bitcoin and blockchain pose little risk to payments giants - Credit Suisse

Bitcoin and blockchain pose little risk to payments giants - Credit Suisse

05 August 2016  |  17338 views  |  0 comments | 23 tweets | 28 linkedin
UBS and Credit Suisse launch fintech accelerator

UBS and Credit Suisse launch fintech accelerator

22 March 2016  |  25440 views  |  1 comments | 49 tweets | 22 linkedin
Markit acquires syndicated loans tech from JPMorgan

Markit acquires syndicated loans tech from JPMorgan

09 February 2016  |  5891 views  |  0 comments | 4 tweets | 4 linkedin
Niederauer backs 'smart securities' startup Symbiont

Niederauer backs 'smart securities' startup Symbiont

09 June 2015  |  6189 views  |  0 comments | 4 tweets | 12 linkedin
Credit Suisse paper offers qualified bitcoin backing

Credit Suisse paper offers qualified bitcoin backing

24 March 2015  |  8923 views  |  0 comments | 5 tweets | 9 linkedin

Related company news

 

Related company information

Credit Suisse

Related blogs

Create a blog about this story (membership required)
visit https://www.niceactimize.comvisit www.atos.netvisit www.solutions.lexisnexis.com

Top topics

Most viewed Most shared
Ripple boss predicts central bank adoption of blockchainRipple boss predicts central bank adoption...
18452 views comments | 28 tweets | 31 linkedin
Singapore central bank open sources blockchain prototypesSingapore central bank open sources blockc...
12734 views comments | 16 tweets | 29 linkedin
AmEx partners Ripple and Santander for blockchain-enabled cross-border paymentsAmEx partners Ripple and Santander for blo...
11306 views comments | 15 tweets | 41 linkedin
UK cryptocurrency exchange startup launches debit card for spending bitcoinUK cryptocurrency exchange startup launche...
9126 views comments | 26 tweets | 37 linkedin
Barclays warns of unprecedented online fraud this ChristmasBarclays warns of unprecedented online fra...
8519 views comments | 15 tweets | 31 linkedin

Featured job

Competitive
London, UK (or flexible)

Find your next job