TABB Group Fixed Income recently published two new research pieces. One for which we spoke with 23 swaps dealers about everything and anything (link here), and the other in which we took a deep dive into what an agency desk for swaps trading might look like and why it matters (link here). The short story, which the WSJ covers in this article, is that the move towards electronic trading in swaps will drive dealers to create a new business model designed to help clients find liquidity in the swaps market rather than making the liquidity for them as principal. In a slightly different way, this model is also enticing to interdealer brokers in asset classes where creating a formal SEF does not make sense for them.
“The interdealer brokers will start opening up access to clients and can start to compete directly with dealers,” said Kevin McPartland, director in fixed-income research at TABB Group in New York.
Read the full article at WSJ.com. And for a deeper dive, please check out the research studies I referenced above.