Operational Risk Veteran Is Named CRO at CLS

The CLS foreign exchange settlement services utility has named longtime operational risk executive Deborah Hrvatin chief risk officer.

CLS said on November 5 that Hrvatin, most recently of Citigroup following 22 years with Deutsche Bank, will be a member of the executive management committee and lead the risk function globally. “As a specialist in risk management and strengthening controls,” the announcement said, “she is responsible for CLS's risk management framework and for building an enhanced culture of risk identification, challenge and mitigation.”

“CLS plays a crucial risk-mitigation role in the FX industry,” Hrvatin said, “and I am looking forward to further embedding a culture of risk identification, challenge and mitigation at one of the world's leading global infrastructures.”

At Citigroup since 2017, Hrvatin was global head of operational risk management for the Institutional Clients Group. At Deutsche Bank, her senior positions included head of operational risk for the Americas region and the Global Corporate Finance division and chief operating officer of the Global Securitization Group. With BBA and MBA in International Finance degrees from Hofstra University, Hrvatin began her career in financial services as a commissioned bank examiner with the Federal Reserve Bank of New York.

As she moved into the CRO role officially on October 28, Naresh Nagia, who had that title since 2011, spent 25 years with Citi and was CRO of investments at Genworth Financial, became CLS's chief ecosystem risk officer. In a statement to GARP Risk Intelligence, CLS explained that Nagia “will build on CLS's robust risk dialogue with member and central bank participants, as well as the wider FX community, to further improve systemic risk awareness and mitigation. Partnering with Deborah, Naresh will also identify emerging ecosystem risks and opportunities in order to appropriately position CLS's current and potential strategic capabilities.”

Hrvatin “is a strong addition to our team,” said interim CEO Gilbert Lichter. “In her new role, she will be able to draw on her extensive experience in risk management from some of the world's largest sell-side institutions to further the CLS risk agenda.”

Systemically Important

Launched in 2002 to mitigate foreign exchange settlement risk, London-headquartered CLS is regulated by the Federal Reserve Bank of New York; serves more than 70 financial institution members and more than 25,000 third-party participants; and settles some $5.5 trillion of payments on an average day. Its CLS Bank International is designated a Systemically Important Financial Market Utility (SIFMU).

Recent developments include the July 31 announcement of same-day settlement service CLSNow, enabling banks to exchange currency positions with mitigated settlement risk on a near-real-time basis, with JPMorgan Chase and Goldman Sachs as the first to go live. In August, CLS said China CITIC Bank International became the first Chinese bank to access CLSSettlement as a third-party client.

Lichter, Euro Banking Association secretary general and former CEO of EBA Clearing, is one of two independent CLS Group directors - the other is board chairman and former HSBC Holdings operations and technology chief Kenneth Harvey - who have served as interim CEO since David Puth stepped down in September 2018. Harvey noted then that over six years, Puth presided over the SIFMU “transition” and “led the development of new products and services to address the market's wider settlement, processing and data needs.” (See CLS Grows Well Beyond Spot Settlement)

Marc Bayle de JessÉ will be taking over as CEO on December 2 after serving as director general, market infrastructure and payments, and chairperson of the Market Infrastructure Board, European Central Bank. He was previously senior adviser in the general secretariat of Sicovam, the French central securities depository, now part of the Euroclear Group.

Bayle de JessÉ joined the ECB in 1997 and has been chairman of the European System of Central Banks Market Infrastructure and Payments Committee, and a member of the Bank for International Settlements Committee on Payments and Market Infrastructure.

Head of Information Services

Another appointment during the period between permanent CEOs was that of Masami Johnstone as head of information services, responsible for “the ongoing development of CLS's data business and building our world class analytical capability, based on the largest single source of FX-executed trade data available to the market,” the company said in September.

Johnstone had been head of buy side sales at Euronext, and before that head of institutional quant research. She also spent a decade with ITG Europe and began her career at Barings Asset Management.

“CLS's data business is an important part of our product portfolio where we apply our unique position at the center of the FX market to solve industry problems for market participants,” said chief strategy and development officer Alan Marquard. “Masami will be able to draw on her extensive industry experience to build on the success of the data business by expanding our offering to clients with insights for improved trading strategies, smarter business decisions and better FX risk management.”