A Perfect Storm
Commentators cite a decline in volumes and lack of volatility as being the key reasons for a drop in rates trading revenues.
Our analysis shows that the situation is more complex. Several regulatory, market and risk management factors have combined to create a ‘perfect storm’ in rates markets.
We expect that some of the recent structural changes will remain, but the market volatility and revenue opportunities may improve as key central banks’ policies and strategies diverge.
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