An article in eFinancial News asking why e-Swaps have yet to take off:

Electronic swaps trading struggles to gain traction

Main points and my view:

– 5-10% of IRS traded electronically (I’d lean towards 5% given these markets) but JPM claim 5-30% for them, depending on market conditions
– Huge gap between the best e-Swaps houses (Barx, DB, RBS and JPM) and the rest (Indeed, far more so than Govt Bonds)
– Price transparency (lack of) and market conditions have hindered multi-dealer vs. single-dealer, as has the above dealer “quality gap” (Multi-dealer plarforms need more price transparency if they truly want to take off, but there are tier-1 dealers and tier-10 dealers, and not much in between)
– Multi-dealer (TradeWeb and LiquidityHub) will overtake single-dealer in time (not in these markets) says Goldman Sachs (what are they up to? 😉 ) and e-Swaps will account for 50% of trades in 18-months time according to Quod Financial (based on what? As they’d say in The Castle “tell ‘im he’s dreamin’!!!”)
– TradeWeb does $7bn in swaps a day (bet EONIA covers a good chunk of that) and have 9 fusion banks PLUS another 6 joing for USD IRS (although those 6 are 6 of the Fusion 9)
– SwapsWire adds value to e-Trading (does it? to the big boys making markets it does. Most tier-2 banks don’t use it or don’t even know what it is!)

Speaking of LiquidityHub, not much news of late, however I was chatting with “a source close to” / “a friend of” the system and they tell me that the number of trades have picked up. The most surprising part is that the bulk of them seem to be coming via Reuters rather than Bloomberg! Seems Reuters have a better GUI, so a client was telling me.

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