Citi rolls out client-to-client bond platform


Citi becomes the latest bank to roll out a new platform designed to enable client-to-client bond trading.

The platform, Citi’s Credit Cross will enable clients to post their interests in corporate bonds and seek to match the other side of the trade from amongst other Citi clients, rather than from the bank directly.

This move follows similar crossing style networks launched by other bank (and non-bank) firms including: UBS (PIN for CDS), Goldman’s GSessions, BlackRock’s Aladdin Trading Network, StateStreet’s existing FICross.

The move comes in the wake of continuing fall in bond inventories held by primary dealers, as banks continue to reduce balance sheets ahead of new Dodd-Frank regulations.

Primary Dealer 4wk moving average of corporate Bond inventories Held

Chart showing US Primary dealer inventories of corporate bonds ($million)

Chart from Sober Look Blog here

4 Responses

  1. Some more comment on this new platform here (http://blogs.wsj.com/marketbeat/2013/01/11/citis-new-bond-trading-platform-latest-in-electronic-offerings/) and here (http://thetradenews.com/news/Asset_Classes/Fixed_income/Citi_redefines_bond_platform_after_fragmentation_debate.aspx).

    The article on TheTradeNews says that Citi will not be making the system available for corporate bonds but only LATAM sovereigns. I wonder whether this will change now that the Basel III definitions for HQLA has been extended to investment grade corporates. This will have an positive impact on the bank’s willingness to hold & repo corporate bonds.

  2. […] given the reduced appetite to warehouse large long-term inventory positions, a successful rates business must include a strong and diverse client distribution franchise, to […]

  3. […] Caplin covered other Credit trading initiatives that deal with fragmented liquidity here […]

  4. […] covered this drop in primary dealer bond inventory in a previous post talking about Citi’s new client-to-client bond […]

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