Hunt for toxic flow hits one of banking’s old problems

Wider use of mark-out tools helps banks spot ‘bad’ trades – and also stirs debate on pay

This article is the third in a four-part series on front-office digital change. The first two are available here and here.

To illustrate what his business has been working on for the past year, the trader holds up a graph on a single piece of paper: the y-axis reflects the spread for a single transaction, positive numbers dropping to zero and then into negative territory, while the x-axis shows time passing. On this background is a single, jagged blue line, starting high up on the extreme left-

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