23 July 2016
Find out more

Citi bond deals raise doubts about future of electronic trading

10 August 2004  |  6122 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  |  4798 views  |  0 comments
MTS to launch Polish government bond market

MTS to launch Polish government bond market

21 May 2004  |  3470 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  |  3145 views  |  0 comments
Settlement failures hit Italian bond volumes

Settlement failures hit Italian bond volumes

03 February 2004  |  2883 views  |  0 comments
Electronic bond trading shows some stability

Electronic bond trading shows some stability

25 November 2002  |  5116 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit capgemini.comVisit VocaLink.comFind out more

Top topics

Most viewed Most shared
MasterCard agrees £700m VocaLink acquisitionMasterCard agrees £700m VocaLink acqu...
7895 views 14 comments | 32 tweets | 36 linkedin
hands typing furiouslyWhat Every FinTech CEO Should Know About R...
7753 views 0 | 14 tweets | 8 linkedin
hands typing furiouslyBanking on IoT: Security in the Internet o...
7576 views 3 | 19 tweets | 6 linkedin
Santander doubles down on fintech fundSantander doubles down on fintech fund
7532 views comments | 22 tweets | 28 linkedin
Brexit-scarred London fintech startups enquire about moving to BerlinBrexit-scarred London fintech startups enq...
7368 views comments | 16 tweets | 16 linkedin

Featured job


Brussels (Belgium) or Paris (France)

Find your next job