Following its temporary ban from trading on NewEuroMTS earlier this month, US securities firm Goldman Sachs is now withdrawing completely from the European government bond trading platform.
Goldma was temporarily barred from trading on the NewEuroMTS platform - where banks trade government bonds from central EU countries that have not yet joined the euro - after allegedly violating market-making rules.
The suspension was due to expire on Monday, but according to a Financial Times report, the US bank has decided to withdraw from the platform completely because the rules had become "too onerous", particularly after being tightened by MTS last year.
The regulations automatically suspend banks from trading if they do not meet market-making obligations.
But Goldman claims the market-making obligations were too onerous for what are illiquid and fragmented markets, adding that it would continue to service clients in the eastern European bond market on other platforms.
Citigroup was the last big US securities firm to be banned from an MTS platform. In August 2004 the bank pushed through EUR11 billion in paper sales in two minutes over the automated MTS platform. As the value of futures contracts fell and traders moved to cover their positions, Citigroup re-entered the market and bought back about EUR4 billion of the paper at cheaper prices.