Buy side backs call for US Treasury new-for-old scheme

A programme of bond exchanges could revive liquidity in off-the-runs

Off-the-run bonds are increasingly illiquid

Asset managers want the US Department of the Treasury to conduct regular exchanges of off-the-run government bonds to ease liquidity constraints in the market.

In a proposal submitted to the Treasury last week, BNP Paribas Investment Partners called for a weekly exchange scheme that would allow market participants to swap off-the-run bonds for newly minted on-the-run securities.

BNP Paribas Investment Partners is the asset management arm of the French bank.

The proposal, seen by, is sim