Eight North American banks and International Clearing Systems Inc., Chicago, a subsidiary of the Options Clearing Corp., have begun the application process to form a foreign exchange clearinghouse to be called Multinet International Bank.
Multinet has filed for permission to become a limited purpose New York state bank and trust company, and for membership in the Federal Reserve System. The clearinghouse would act to reduce foreign exchange counterparty risk and reduce costs for members, said Larry Recknagel, president of International Clearing Systems, and the designated Multinet president.
Multinet has existed as a project among its member banks since 1992. Trading in U.S. dollar and Canadian dollar spot and forward contracts is expected to begin in early 1995, with other currencies added within the first year of operation subject to approval.
The banks with equity participation are: Chase Manhattan Bank; First National Bank of Chicago; Bank of Montreal; Bank of Nova Scotia; Canadian Imperial Bank of Commerce; National Bank of Canada; Royal Bank of Canada; and Toronto-Dominion Bank.
Garrett Glass, a senior vice president with First Chicago, is the designated chairman.
CHICAGO - CNA Insurance Cos. is offering a group annuity contract with returns tied to the performance of the Goldman Sachs Commodity Index, but with principal guaranteed by CNA.
CNA is promoting the contract to midsized defined benefit plans as a means to increase market diversification, and as a chance to capture any upside return on commodities prices.
Under the terms of the five-year contract, if the GSCI is up 25% or more after the first year, the investor can lock in those gains, said Richard W. Dubberke, vice president. Conversely, if the contract is down 15% or more after the first year, CNA can elect to close out the contract, returning the full principal to the investor.
CNA hasn't signed on any clients for the contract yet.