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It's Getting Harder to Trade in Bond Markets as Banks Pull Back

  • Pockets of market grind to a halt as trading desks cut risk
  • Liquidity squeeze drives investors into credit default swaps
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Photographer: Victor J. Blue/Bloomberg

The magnitude of losses across global markets has spooked bond traders at banks.

Many are slashing risk, and some are refusing to buy or sell with clients at all if it means they will have to hold the bonds even for a short while, according to market participants. The biggest global banks -- including Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. -- have been among those cutting back in parts of the debt markets in Europe and the US, the people said.