03.04.24
The Radical Changes Coming to the World's Biggest Bond Market
by: Kate Duguid, Nikou Asgari and Costas Mourselas
The $26.5 trillion U.S. Treasury market is the biggest and most liquid in the world and Treasury securities are held by investors and central banks across the globe. But growing problems could threaten the asset's supremacy in the financial world. On three occasions in the past decade, crises have precipitated a dysfunction in the market. Such strains have pushed the five main government entities that regulate the Treasury market to discuss big changes. The Federal Reserve has enacted programs to reduce the chance of another repo crisis while the Treasury Department has increased market transparency. The Securities and Exchange Commission has passed rules that will remodel the Treasury's market plumbing by forcing more trades through a clearing house. Nate Wuerffel, head of market structure at BNY Mellon and a former head of domestic markets at the New York Federal Reserve, says that if the reforms are well executed, "we could be in a world where 10 years from now the Treasury market is even more efficient and liquid than it is today."
Read the full article on Financial Times