The series of changes will make it easier for regulators to monitor these complex markets and could drive down the large cut that banks take from most bond trades and make it cheaper for investors to buy and sell bonds. But some industry experts have said that more transparency in the trading of bonds could make it harder to buy and sell some less popular bonds because investors will not want to have their enormous trades exposed. This could drive up the cost of borrowing for companies and governments.
Bond Trading Loses Some Swagger Amid Upheaval
By NATHANIEL POPPER and PETER EAVIS
Bond traders have long defined Wall Street’s swagger and, in good years, generated a large share of its profits. Now, though, an upheaval is taking place in the bond business that is wiping out billions in profits and thousands of jobs.
Wall Street banks like JPMorgan Chase, Goldman Sachs and Credit Suisse managed to keep their grip on the bond market in recent years, amassing huge inventories of bonds for clients and trading them mostly in private over-the-phone transactions.
“It was a rock-solid kind of career not too long ago,” said Lou Ricci, a co-founder of the Hagan-Ricci Group, a headhunting firm. “You give me a really good bond trader right now, I probably can’t find them a job.”