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BCG Report – Adapting to Digital Advances: Global Capital Markets 2015


(BCG Report)

Digital innovation is allowing new value propositions to emerge in sales and trading.

Download BCG PDF

  • Hollywood
    HollywoodMay 21, 2015"So the FER want to mandate dealer disintermediation. Great - There are unintended consequences of regulation. Turnover in the corporate bond market is down 48% since 2007 and, it has been reported that bid / ask spread has doubled since Basel III was implemented. News flash - dealers are not required to participate in non-profitable lines of business. See CIBC's recent departure.…"
  • Sundown
    SundownMay 18, 2015"There are very few times that I read a report like this and cannot find someway to critically pick it apart. There is virtually nothing in this report that isn't directly on target in my opinion. One of the best pieces in terms of research and context I have seen that properly explains the intersection between technology, regulation, bank financial reporting requirements (and shareholder demands) with the current market structure. This piece appears to be the best so…"
  • Merlin
    MerlinMay 16, 2015"Agreed, fine paper, and a lot to digest, but the underlying theme of leveraging technology and digital advances has been in vogue for years. Bringing additional focus always helps, but much of this paper only partially applies to the subject of this weekly newsletter, Corporate Bonds. Some of the statements and points throughout just don't apply to the Corporate Bond market. One example; there is discussion of an information shift that has occurred giving clients an a…"
  • Wolfman
    WolfmanMay 15, 2015"This paper forces us to give real thought to the market structure and the structure of the market participants. Is technology going to solve the problems of raising capital and transferring risk that the CMIBs currently solve? What do I mean by this? Does the CMIB repreasent a condition in which an entity is put in place to serve multiple purposes because the technology doesn't yet exist to do so without that entity in place? Does the digital transformation of the ind…"

Bankers and Regulators Voice Fears on Bond Market Volatility

Barney Frank

(DealB%k – Peter Eavis)

Those voicing such fears say that recent changes in the bond market could change the way that Wall Street banks, large bond funds and trading systems would behave in a period of turbulence. Other developments have left the market vulnerable, they say. A huge rally in bond prices over the last several years, stoked by vast amounts of monetary stimulus by central banks, may have made the market vulnerable to a sharp sell-off.

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  • Sundown
    SundownMay 11, 2015"The question posed at the end of the article is really the starting point. The bottom line, is investors have had the luxury of knowing that the banks will always be there to step in to take risk in times of need because the dealers have enjoyed the luxury of cheap leverage over the years. I guess my questions in response would be “Is it a god-given right for an investor to not bear the actual market risk of the security they are buying? Should they simply just be res…"
  • Iceman
    IcemanMay 10, 2015"What is interesting is what is not being said. When redemption's start happening there will be a list of assets that will have liquidity however this is likely to be far less as a proportion to the total amount of cash required. In short if a fund manager wanted to sell 50% of his portfolio to meet redemption's it is likely he will only get prices on a small proportion of the assets as dealers balance sheets have changed which is a direct impact from regulation. The s…"
  • Avatar
    ViperMay 9, 2015"Bond market liquidity gets more focus instead of the size of the asset manager's assets versus the street's capital. The street still has a tremendous commitment and incentive to participate in both the US Treasury/government markets and spread products, but is now fully aware that when the asset managers need liquidity it makes no sense to step in front of that train. Other than the occasional flash crash, asset manager's growth and size is not so much the culprit bu…"
  • Wolfman
    WolfmanMay 8, 2015"Where do I begin? Market vulnerability? The street acting in it's own best interest? Perhaps the government acting in its own self interest? If we look at the 10-year note yields from 1945 to 2015, you see a beautifully drawn image of Mount Everest, with the peak sometime around August 1981 with a yield higher than 14.5%. As rates began to rise, the market relied on what it knew best and predicted many time along the way that 6, 7, 8, 10 or 12% would likely be the pea…"