Bloomberg and Thomson TradeWeb launch swaps platforms

Bloomberg and Thomson TradeWeb launch swaps platforms

Automation of interest rate swaps (IRS) trading has shifted up another gear as both Bloomberg and Thomson TradeWeb launch multi-dealer IRS trading platforms.

Bloomberg SwapTrader is a multi-dealer request-for-quote (RFQ) dealing system that will initially trade euro denominated benchmark swaps. Users are able to obtain pricing quotes simultaneously from up to three banks and then execute the trade seamlessly at the best quoted price.

Commenting on the launch of the platform Russel Levi of Bloomberg, says: "As the market matures, clients and dealers are supporting a multi-dealer platform with aggregated liquidity and extended STP efficiencies."

SwapsTrader is available to user of Bloomberg's Terminal product. The vendor has signed ten marketmaking banks to the system, with five - Morgan Stanley, ABN Amro, Bank of America, Barclays and RBS - going live at launch.

Thomson TradeWeb has signed up JPMorgan, Barclays Capital, Morgan Stanley, Dresdner Kleinwort Wasserstein, HSBC and ABN Amro to its auction-based dealer-to-client swaps platform, and says more liquidity providers are set to join in the coming weeks.

The Thomson TradeWeb platform will initially be rolled out to a select group of European buy-side institutions, followed by its full buy-side customer base. The system works in the same way as the Bloomberg platform - by using a RFQ model, investors can simultaneously request a price from up to three dealers.

Lee Olesky, president, Thomson TradeWeb, says the dealing system allows the analysis, execution and Isda confirmation of swaps simply and electronically.

"We expect to roll out more functionality and other currencies to our interest rate swaps product over the course of the year," he adds.

Both vendors say their platforms will improve transparency and reduce risks and operating costs.

Interest rate swaps are the largest OTC derivatives market. According to statistics from the International Swaps and Derivatives Association (Isda) outstanding global notional volume traded for interest rate swaps grew 16% during the first six months of 2004 to a total of $164.49 trillion.

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