I refer quite a lot to specific ECNs on this blog; TradeWeb, LiquidityHub, Bloomberg etc, etc. Rarely do I mention the specific banks that are good or poor on these ECNs. So who are the best and worst of these 30+ liquidity providers?
Perhaps the best way to express this is to have a tiering system, much like that which these banks employ to categorise their clients. I have considered this for Europe only and thus the ranking doesn’t take into account their prowess in the US, for example. Likewise it will not contain all the banks, more an educated selection.
Tier 1: Global Bank with a total demonstrable commitment to FI eCommerce.
Tier 2: Global Bank with a less demonstable commitment to FI eCommerce
Tier 3: Regional Bank with a less demonstable commitment to FI eCommerce
Now Tier 3 may be harsh on some regional players who do their best, but ultimately for them their technology and, especially, product coverage will not allow them to be considered Tier 1 or 2. Of course a Tier 1 in a certain geographic location in a certain product set (e.g. Capitalia with Italian Govies in Italy) will probably mean a Tier 3 ranking overall. Likewise a strength in a product set across all Europe but not the main product (Euro Govies) will probably mean a Tier 2 rating (e.g. RBC with retail credit). Euro Govies will have a stronger weighting over other govies and credit, given it is what drives the e-Trading market in Europe at present.
So here goes:
Tier 1: Barclays Capital, Deutsche Bank, JP Morgan
Tier 2: ABN Amro, BNP Paribas, Credit Suisse, Dresdner, Goldman Sachs, HSBC, Merrill Lynch, Morgan Stanley RBC, RBS, Soc Gen, TD, UBS
Tier 3: Calyon, Capitalia, Danske, KBL, Nordea, UBM/HvB, Winterfloods etc
The Tier 1 guys stand out for me, as they have really created e-Brands in Europe with Autobahn, BARX and JPEX. No surprises that these will be amongst the leading Swaps dealers when LiquidityHub gets going.
Within Tier 2 there are, as they say in Bordeaux, “super seconds” (Citi and Morgan Stanley) and those who maybe deserve Tier 3 status except they’re just too big overall (I’ll resist saying whom, but you probably know). Tier 3 simply will struggle to make Tier 1 but could be Tier 2 with better organisation and consolidation (UBM and Calyon???).
Please note this expresses my opinion, gathered over the past four years, so please let me know what you think. I’m very happy to be told I’m wrong, but at least let me know why! 
May 29, 2007 at 10:51 am
Interesting categorisation..and not easy given the goals of the players.
Certainly a couple of big players deserve Tier 3 for effort / success.
Personally sorry for ABN..would have them as Tier 1 again for e-com success / effort …..can’t help feeling they’ve lost out due to weaker / disappearing brand ?!?.
May 29, 2007 at 10:57 am
Can’t disagree Mac, although a strong reason not to afford them Tier 1 or “Super Second” status – IMO – is their now uncertain future.
May 30, 2007 at 9:03 am
RBS are top two for swaps, is their govvies business so bad that they arelegated to tier 2?
Poss tier 1.
I would love to know how the opinion was formed as access to trading data for all banks is hard to come by-Delta data?
May 30, 2007 at 10:19 am
Yeah I’d certainly have RBS as a “super second” but not sure they’ve made that leap, be it perception only, into Tier 1. As I said above, branding is the main differentiator. Michelle Neal and her team seem to be very much heading in that direction however.
Opinion is based on experience over four-years, the names that come up (RBS increasingly so), stats I’ve seen here and there. Nothing exceptional scientific about it.
May 30, 2007 at 10:23 am
Also, Tier 2 isn’t so bad. In fact a number of these in Tier 2 are there through choice, they don’t see being Tier 1 in “e” is part of their strategy, yet……being a Tier 1 Investment Bank is.
July 12, 2007 at 7:54 pm
[...] challenge to the “complex rating algorithm” that waratah used to great effect in that the good the bad and the ugly post (rating dealers FI etrading offerings), meaning next year’s update should look [...]
July 18, 2007 at 8:51 am
you should check our Fortis, small bank, huge hit rates.
July 19, 2007 at 1:05 pm
By huge hit rates do you mean 25% plus?
Not many banks of size would consider a huge hit rate as being such a good thing. They’re looking to win 1 in 4, 1 in 5 trades. Winning too many tells me that the traders are too agressive.
But that is a generalisation. And apologies for leaving Fortis off. I’d say lower tier-2.
August 5, 2007 at 5:09 pm
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August 6, 2007 at 10:44 am
We may have differing ideas of what an “Adult” site is, but it looks more like a search engine, yeah?
November 27, 2007 at 10:37 am
[...] top-3 of Deutsche Bank, Barclays Capital and JP Morgan corresponds with my Tier-1 of European e-Trading banks in May this [...]
January 27, 2008 at 5:35 pm
[...] single-dealer, albeit one of Waratah’s Tier-1 FI e-Trading dealers, is a massive problem. Multi-dealer is undoubtedly what clients such as Hedge Funds and Tier-1 [...]
February 14, 2008 at 10:07 am
[...] DB’s Kevin Arnold must read this blog, as he repeats my tier-1 of a “German bank, American bank and a British bank”……unless he meant [...]
July 16, 2008 at 9:23 am
Hi – I’m an intern working at RBS this year. As part of my programme I’ve been given a somewhat opaque presentation topic related to e-markets. This blog has been quite helpful in giving me a general overview, but I was wondering whether you could direct me to some statistics that I could use. I’m looking for figures to rank RBS against its competitors, in FI and any other e-commerce products. Cheers.
July 16, 2008 at 10:31 am
Jon, the best thing to do is get stats from the vendors like TradeWeb, Bloomberg etc that will show where you are ranked. It will not say who the others are but will give you a place for RBS. Your FI e-commerce team (e.g. Paula Alves) will have all these for sure.