ELECTRONIC TRADING PLATFORMS have quickly gained
market share in bonds, forex, equities and futures. Interest
rate derivative trading has proved much harder to move online.
Banks and interdealer brokers have held out more successfully
in interest rate derivatives than almost any other
commoditized financial market against the transparency and
smaller margins that would be a likely result of going
electronic.
Amid the financial services industry's initial enthusiasm for
all things "e", several electronic platforms were launched to
handle interdealer swaps trading. They failed, however, to attract
liquidity. In the dealer-to-client space, electronic trading has
been even less successful. Platforms that were set up in the final
stages of the dot com boom to let end users trade swaps directly
didn't last long. Examples included CFOWeb, Swaps.com and
TreasuryConnect.
Recently, though, old, half-forgotten initiatives are coming
once more to the market's attention, and new platforms are being
born. In particular, several groups...
