Editor’s letter
The rehabilitation in all things technological – as far as the bond markets are concerned – and the improvement in corporate bond liquidity are providing a welcome boost to the area of electronic bond trading. Electronic trading from corporate bonds first emerged in the mid-1990s and rapidly failed to live up to many of the industry’s promises. One key problem was that providers failed to take account of the nuances of the corporate bond market – illiquidity and fragmentation.
As a result many platforms assumed that the market would be willing and able to jump from a relationship-led, over-the-counter market to one of exchange trading within short period of time. Combined with collapses in technology spending by financial institutions and the liquidity crisis that rocked the US and European bond markets in 2002, many trading platforms retreated back to the government bond markets or threw in the towel altogether.
However after a year of improving liquidity, trading platforms are returning, to a large extent chastened and less complacent. At the same time a number of the largest banks in credit have been pushing their own electronic trading platforms in an attempt to reap the benefits of greater efficiency and speed that electronic trading offers.
Perhaps after the false dawn of the 1990s, 2004 will finally bring the reality of electronic trading to corporate bonds.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
European banks search for consensus on credit spread risk
New EBA guidelines spawn diverging interpretations of which products must be assessed for CSRBB
Dutch regulator in new push on algo manipulation
AFM teams up with Oxford Uni academics to develop data models that will identify “harmful” collusion in automated trading
Fed relief plan for G-Sib agency clearing welcomed
Rollback may revive interest in European FCM model, as principal clearing still treated punitively
Indian initial margin launch brings operational headaches
Conglomerates with multiple entities trading derivatives pose compliance challenges for dealers
Fed’s new liquidity rule spells more pain for regional banks
Limit on HTM assets follows move to deduct unrealised losses from capital buffers
Ruled out: can regulators settle the pre-hedging debate?
Market participants are at odds over the practice and whether regulation or principles can settle the score
SEC streamlines overhaul of stock trading rules
Tick size and access fee rules simplified from first draft, but Peirce still questions rationale
Supervisors use generative AI to tame ‘chaotic’ data
Officials merge credit databases with unstructured reports to sharpen bank oversight, explains Banco de España ex-deputy