Hanging Up the Phone - Electronic Trading in Fixed Income Markets and its Implications

16 Pages Posted: 9 Mar 2016

See all articles by Morten L. Bech

Morten L. Bech

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures

Annamaria Illes

Bank for International Settlements (BIS)

Ulf Lewrick

Bank for International Settlements (BIS) - Monetary and Economic Department; University of Basel - Faculty of Business and Economics

Andreas Schrimpf

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: March 6, 2016

Abstract

This article explores drivers and implications of the rising use of electronic and automated trading in fixed income markets - a process we refer to as "electronification". We take stock of the current state of electronic trading and how it has changed the market ecosystem, its resilience and its overall functioning. We argue that the impact of electronic and automated trading is visible in a number of dimensions of market liquidity and price efficiency. With market participants adjusting to the new market structure, several new challenges have emerged that warrant attention from policymakers.

JEL Classification: F31, G12, G15, C42, C82

Suggested Citation

Bech, Morten L. and Illes, Annamaria and Lewrick, Ulf and Schrimpf, Andreas, Hanging Up the Phone - Electronic Trading in Fixed Income Markets and its Implications (March 6, 2016). BIS Quarterly Review March 2016. Available at SSRN: https://ssrn.com/abstract=2744866

Morten L. Bech (Contact Author)

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland
41612808923 (Phone)

Annamaria Illes

Bank for International Settlements (BIS) ( email )

No Address Available

Ulf Lewrick

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

University of Basel - Faculty of Business and Economics ( email )

Petersplatz 1
Basel, 4001
Switzerland

Andreas Schrimpf

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

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