Photographer: Andrew Harrer/Bloomberg

One Bond Veteran Is Unimpressed With the Treasury Market's Evolution

One Wall Street veteran says he’s not impressed with efforts to get the world’s biggest bond market up to speed with structural changes in other capital markets.

That’s the take of David Rutter, founder of Treasuries-trading platform LiquidityEdge LLC. He expressed his view Tuesday as an audience member during the question-and-answer period after a panel discussion at a conference on the market’s evolution.

“There is less innovation in the U.S. Treasury market than any other market I am involved with,” Rutter said at the event at the Federal Reserve Bank of New York. He joked that the only thing that’s clearly changed since the Treasury market’s overseers started the annual event in 2015 is that the participants all looked older.

While the remark drew some laughs, the panel moderated by Tom Wipf, vice chairman of institutional securities at Morgan Stanley and chair of the Treasury Market Practices Group, disagreed.

Ryan Sheftel, a panelist and head of fixed income for GTS, conceded that the pace of change in the Treasuries market, including aspects like introducing centralized clearing, is slow. But he said most market participants now see the changes needed as “logical” and he’s hopeful the market will evolve.  

Another panelist, Dan Dufresne, global treasurer at Citadel, pushed back on Rutter’s views as well, saying in part that firms -- including his own -- are “fighting hard to have new entrants in the marketplace and pushing for lower barriers to entry and a level playing field.”

Earlier in the day, Craig Phillips, counselor at Treasury, told the gathering that the department is “actively considering” the public release of Treasuries trading data now being collected only for regulators.

That raises the possibility that a year from now, if the New York Fed hosts the event again, Rutter may find that the pace of change has accelerated.

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