25 September 2017
visit www.ncr.com

Citi bond deals raise doubts about future of electronic trading

10 August 2004  |  6388 views  |  0 Citygroup

MTS, the European electronic fixed income network, is contemplating the introduction of permanent caps on liquidity after a series of rapid-fire transactions by Citigroup last week exposed fault-lines in the market.

The government bond trading market was thrown into confusion last Tuesday as Citigroup pushed through a total of EUR11 billion in paper sales in two minutes over the MTS platform. As the value of futures contracts pegged to the bond market went into freefall and traders moved to cover their positions, Citigroup moved back into the market and bought back about EUR4 billion of the paper at cheaper prices.

In the immediate aftermath of the sale, MTS moved to impose temporary limits on the value and volume any one dealer can push through the system at a time.

The dealings have provoked doubts within the markets about the wisdom of moving more fixed income business to electronic platforms, where the size and speed of processing can have short-term knock-on effects to market-wide pricing and stability.

A group of primary dealers are understood to be meeting today to discuss the ramfications of last week's events, while MTS says it will reconsider the emergency restrictions at next month's board meeting.

Citigroup has declined to comment on the transactions.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

MTS teams with ATFox and HPC to extend electronic swaps franchise

MTS teams with ATFox and HPC to extend electronic swaps franchise

09 June 2004  |  5045 views  |  0 comments
MTS to launch Polish government bond market

MTS to launch Polish government bond market

21 May 2004  |  3791 views  |  0 comments
NewEuroMTS market for EU accession states surpasses EUR1 Billion in trades

NewEuroMTS market for EU accession states surpasses EUR1 Billion in trades

18 February 2004  |  3416 views  |  0 comments
Settlement failures hit Italian bond volumes

Settlement failures hit Italian bond volumes

03 February 2004  |  3144 views  |  0 comments
Electronic bond trading shows some stability

Electronic bond trading shows some stability

25 November 2002  |  5337 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.ncr.comvisit www.capgemini.comvisit www.temenos.com

Top topics

Most viewed Most shared
AXA launches blockchain to cover late flight compensationAXA launches blockchain to cover late flig...
11006 views comments | 15 tweets | 30 linkedin
SBI Ripple Asia advances on South KoreaSBI Ripple Asia advances on South Korea
8937 views comments | 16 tweets | 1 linkedin
Apple P2P payments service nears launchApple P2P payments service nears launch
8804 views comments | 19 tweets | 27 linkedin
European Commission makes fintech a priority in supervisory shakeupEuropean Commission makes fintech a priori...
8480 views comments | 33 tweets | 46 linkedin
hands typing furiouslyBlockchain is a new way of thinking?
7056 views 2 | 9 tweets | 1 linkedin

Featured job

A minimum of £200K (not a limiting factor)
London

Find your next job