Frontclear, founded in 2015 by Cardano Development, focuses on building more stable money markets through inclusive interbank markets in developing countries where these markets are often fragmented, illiquid and lack sufficient legal and regulatory assurances.
By providing local banks with guarantees to cover counterparty credit and legal risks, the Amsterdam-based company provides access to global and local interbank markets. This, in turn, allows domestic financial institutions to make more efficient use of their local currency assets, to access local and international financing and to manage their risks more efficiently.
This lowers banks’ cost of capital and puts them in a position from where they can increase their lending to local businesses and at more favourable terms and conditions. An open, active interbank and money market is also a prerequisite for an effective monetary policy that can influence domestic lending.