Economics
Treasury's Complaint Box Overflows as U.S. Bond Market Splinters
- Concern bubbles up in answers to survey on market evolution
- Respondents call for centralized clearing in some letters
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For traders of U.S. Treasuries, the easy part was agreeing some corners of the market need to be more centralized. Now comes the real challenge: figuring out how.
The basic structure of the $13.4 trillion market -- the way dealers trade with each other and with clients -- is splintering. The majority of business on dealer platforms is now done by automated firms, which aren’t required to clear their trades centrally. What’s more, there are at least seven new trading venues in the works, each with a different method for connecting buyers and sellers. And the largest Wall Street dealers have their own systems.