Bloomberg connects to T-Zero credit derivatives STP system
05 July 2006 | 6213 views | 0
Bloomberg is providing users of its Professional desktop with connectivity to T-Zero's post-trade straight-through processing platform for credit derivatives trades.
T-Zero has inked a similar integration deal with Calypso Technology, but the agreement with Bloomberg will enable 250,000 users of the Professional terminal to accesss its affirmation service, so deals can be conducted electronically rather than on paper.
Commenting on the move, Mark Beeston, president of T-Zero, says: "This allows T-Zero to leverage Bloomberg's unparalleled distribution platform to create a scalable solution for the widest possible audience."
The move follows calls from regulators for dealers to automate paper-based settlement and tighten back office risk management procedures in the $17,000 billion credit derivatives market.
In September 2005 the Federal Reserve Bank of New York summoned 14 of the world's major derivatives dealers to discuss major concerns about risk management practices in the industry.
More recently former US Federal Reserve Board chairman Alan Greenspan reiterated those concerns, calling the backlog of unconfirmed trades "unconscionable" and stating that many trades "could be confirmed instantaneously" using available technology.
Beeston says the T-Zero/Bloomberg integration makes "a reality of Greenspan's desire to utilise today's technology to eradicate scraps of paper".
Research released in May by the International Swaps and Derivatives Association (Isda) found that one in five credit derivatives trades made by US banks last year initially contained errors, double the previous rate.