Euro-CP takes to the web
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Euro-CP takes to the web

Trading on indigestion

Ethics for pleasure and profit

Battle of the acronyms

Those unassuming folk who work on the commercial paper desk of many banks are quietly tearing up the rule book about how debt securities are sold. An often neglected corner of the debt capital markets, Euro-CP is proving a breeding ground for ideas that challenge the entire business model that has long been used for selling bonds.

There is nothing inevitable about the current practice, in which the sales teams of a dozen different banks bombard investors with telephone calls proposing deals. It is the sort of sales-oriented business model commonly found in markets where products are highly differentiated, complicated and expensive, such as cars, telephone systems or personal pensions. But simpler, more standardized products are usually sold in quite a different way. A greengrocer, for example, puts his efforts into ensuring that fruit and vegetables are visible, clearly labelled and accessible and then simply waits for customers to pick up what they want.

That is the logic behind several initiatives to shift parts of the debt markets onto on-line systems which allow the investor to take the initiative.

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