2016 European Fixed Income Market Sizing: E-Trading Maturity Through IDB2C?

by Joséphine de Chazournes, October 10, 2016
Industry Trends
EMEA

Abstract

Celent has released a new report titled 2016 European Fixed Income Market Sizing: E-Trading Maturity Through IDB2C? The report was written by Joséphine de Chazournes, senior analyst in Celent’s Securities & Investments practice.

This is Celent’s yearly European fixed income report to update market players on market size, trends, and structural changes.

Electronification patterns are mature in government bonds but not in nongovernment bonds, where the buy side is playing a more active role in the run-up to MiFID II.

Interdealer government bond trading volumes have further dried up because of the economic uncertainty and the increased balance sheet cost, but dealer-to-client business has kept up: it is critical to enhance liquidity by creating an IDB2C microstructure for nonbanks to provide liquidity.

Though volumes are stable in the nongovernment bond interdealer market, there are many market share swings between the platforms. The dealer-to-client market has grown thanks to the client inclusive technologies, venues, and protocols.

“It is time for regulators, DMOs, and IDB platforms to start working on a new microstructure that would enable selected nonbanks to enter the European government IDB secondary market in a safe enough way for governments and dealers alike,” says de Chazournes. “The nongovernment bond market liquidity has shifted: the success of some client-centric venues and protocols is its best proof.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

2

Introduction

3

European Fixed income Market Structure Trends

4

The Government Bond Market

9

 

The Interdealer Market

10

 

The Dealer-to-Client Market

13

The Nongovernment Bonds Market

17

 

The Interdealer Market

17

 

The Dealer-to-Client Market

19

Conclusion

22

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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