Bloomberg and TradeWeb enter multi-dealer electronic swaps trading fray

Competition in dealer-client electronic euro swaps trading is heating up with the launch of two new 'request-for-quote' (RFQ) multi-dealer interest rates swaps platforms in quick succession.

Thomson TradeWeb rolled out its product with six signed-up liquidity providers – ABN Amro, Barclays Capital, Dresdner Kleinwort Wasserstein, HSBC, JP Morgan and Morgan Stanley – and two confirmed buy-side institutions – Bred Banque Populaire and Dekabank on Wednesday. The following day, Bloomberg launched SwapTrader, with five initial dealers participating and a further five set to join the platform, according to Bloomberg. Bank of America and Royal Bank of Scotland, as well as ABN, Barclays and Morgan Stanley, have gone live on SwapTrader.

Both will allow users to request up to three quotes at the same time and will feature straight-through processing. They will compete fiercely for new business in the coming few months, with both claiming to be in the final stages of completing deals with other liquidity providers.

What is unclear is the impact this will have on existing single-dealer platforms, of which Barclays’ Barx, launched in conjunction with Bloomberg in July 2003, is the most prominent.

Eric Bommensath, London-based head of government bond trading at Barclays Capital, claimed that Barx would not be affected, despite Barclays signing up to both TradeWeb and SwapTrader. He said Barx was available without cost to anyone with a Bloomberg terminal.