Primary dealers in the European government bond markets have formed an association to address market issues and press for operational trade processing improvements.
The European Primary Dealers Association (EPDA) - affiliated with The Bond Market Association - will be the first dealers’ forum of its kind to address specific primary and secondary markets issues. The formation of the group comes three months after Citigroup sparked a crisis in the market when it pushed through EUR11 billion of securities in two minutes over the MTS platform.
The EPDA denies the Citigroup sale was the spur to its creation, but admits that a key aim is for the promotion of an efficient and liquid secondary market through voluntary trading guidelines and improved market practices
EPDA co-chair, Christian Mundigo, head of long term interest rates trading at BNP Paribas, says: "Initially, the EPDA will focus on issues that are important to its overall membership and will seek, in particular, to improve the auction and clearing and settlement practices by promoting gradual harmonisation."
EPDA membership currently consists of the top 20 dealers active in the markets. Mundingo says that other primary dealers will be invited to join the Association as associate members.
There are approximately 75 primary dealers in the Euro government securities market. Government debt outstanding in the Euro-zone countries is estimated at EUR4.3 trillion.