Credit Suisse First Boston (CSFB) has launched an electronic international bond repo trading system with the European institutional market in mind.
International RepoTrade is a live, 24-hour, interactive system for trading on-line in 15 currencies, 12 of which are European. It will be actively marketed to pension funds throughout Europe, as well as insurance companies and mutual funds. The service, which is available only on Bloomberg screens, will provide automatic trade execution, collateral assignment, market commentary and audit reports.
The system aims to speed up the repo trading activities which have previously been coordinated via telephone, an exercise which is now viewed as cumbersome", says Ray Kuramoto, head of international repo at CSFB in London. "It potentially can be very time-consuming."
He continues: "Rather than calling up and saying, 'what are your rates for overnight, one week, three weeks, one month, six months, a year, they can now just bring up their screen and look."
Investors with access to one of the 75,000 Bloomberg screens worldwide will be able to use this service without any extra cost. As most CSFB customers have this access, says Kuramoto, International RepoTrade is likely to be used to win new clients. CSFB has more than 40 existing pension fund clients in Europe alone.
This is the eighth electronic system of its kind launched by Credit Suisse. CSFB currently conducts all of its commercial paper business electronically - and is an extension of the US RepoTrade product which currently handles about $20bn in transaction volume a day.
The European electronic trading market is still in its infancy, says Kuramoto, with CSFB's main competitor in the market being Morgan Stanley's RepoLink, but as with most innovations, the US has caught on first, the marketplace is still fragmented. CSFB only conducts a minor proportion of bond trading electronically. "It depends on the nature of products. So high volume, low-margin businesses, labour-intensive businesses, like commercial paper and repo have a natural appeal. The US has definitely caught on to that and now Europe is just waking up to that ." Rachel Oliver"