The Trade: changes through market making

23 April 2014 in THE BOND MARKET by Stefano Vaccino

Recent investment bank results have revealed a continued slump in fixed income business, but a new approach to market making could help drive future profitability, according to Stu Taylor, CEO of fixed income solutions provider Algomi.

"The impact of regulation on bank balance sheets is going to be a permanent feature of this new landscape but it doesn't mean bank fixed income business can never be profitable again. The key to profitability will be getting the market making model right,”

"Banks need to redefine what it means to be a market maker, becoming less focused on using their balance sheets to take on risk themselves and instead become a distributor of fixed income products."

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