CFTC trade rules will create 'winner's curse'
Analysts at Barclays Capital say block trade reporting rules under Dodd-Frank Act will create additional risk for dealers
Rules proposed by the US Commodity Futures Commission (CFTC) on large trades could create a 'winner’s curse', harming liquidity in the market for interest rate derivatives, according to analysts at Barclays Capital.
In a report dated February 10, the bank's interest rate analysts say rules on so-called block trades would create extra risks for dealers, causing spreads on these trades to widen.
Dealers and buy-side market participants have argued the rules will damage liquidity in the market – an
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