Mostly… fixed income and cross product eTrading

May 9, 2007

The True Aim Of Bank Consortium?

Filed under: etrading — holky @ 1:33 pm

FT  today makes a point ive coveyed before (about liquidity hub being the first major and coordinated challenge to current model [in FI]).  The FT comment is about Project Turquoise. It could of course apply to any bank consortium challenging the status quo.

Whether it succeeds or not is much less important than that it establishes that the European stock trading market is contestable; that there is viable competition to the exchanges lurking in the wings. One of the great contributions of industrial economics in the 1980s was to demonstrate that it is potential rather than actual competition that disciplines the pricing of incumbents.

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2 Comments »

  1. I’m sure you’d agree Holky, Turquoise & the concept of “dark pools” is a much bigger deal in equities, given the exchange traded nature of that asset class, than LH is in FI.

    Personally I don’t see LH shaking up the actual FI market that much. More the e-Trading side and to what extent remains to be seen.

    Comment by waratah — May 10, 2007 @ 8:04 am

  2. one of the impacts of LH will clearly be a shake up in fee structures that dealers pay venues. one interesting thing will be how this applies and what change is available to the dealers who are not in LH, come renewal time negotiated on the back of a generally changing landscape.

    Comment by holky — May 10, 2007 @ 9:33 am


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