Goldman and Citigroup to become CBOT swaps market makers

From next month, Goldman Sachs and Citigroup will act as electronic market makers for the Chicago Board of Trade's (CBOT) five-year and 10-year interest rate swap futures contracts.

"The timing is right for the success of the CBOT Swap futures complex," said Ken Tremain, head of North American interest rate derivatives and government bond trading at Citigroup. "Increased transparency and centralised clearing function it offers, combined with the committed liquidity of two major dealers, will greatly benefit users and lead to the overall growth of the swap rate markets.”

The move to bolster liquidity comes on the back of a dramatic decline in activity. According to the CBOT, volume of sales for the period January-May 2006 fell by 58.9% and 55% for the 10-year and five-year contracts, respectively, compared to the same period last year.