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Requests to Trade Went Unanswered During 2014 Bond Flash Move

  • In Treasury-market tumult, dealers stepped back from screens
  • Dealers didn't answer about 18% of client electronic requests
Updated on

Primary dealers didn’t respond to a larger-than normal share of investors’ electronic requests to trade during the Oct. 15, 2014, flash rally in Treasuries, according to data from the Federal Reserve Bank of New York.

Dealers didn’t answer roughly 18 percent of the requests that came through that day on electronic platforms they use to transact with clients, versus around 4 percent on a normal day, according to a report released Monday by the New York Fed. On other days where there were market-moving events, that proportion was about 8 or 9 percent. The report, which was first presented at a conference at the New York Fed last month, also indicated the quick swing didn’t originate in the market where dealers trade with their clients.