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June 2008 | ifr special report | 15 SOVEREIGN BOND MARKETS ROUNDTABLE


issuers in the sense of monitoring performance. I think the movement to multi-platforms has also allowed the issuers to change the terms of engagement with the primary dealer community. Specifically in terms of how the dealer community is measured, and in terms of shifting from measuring the primary dealers in an absolute sense to measuring them in a relative sense, which has brought liquidity back on the screens. I think if we hadn't moved into a multi-dealer environment, those changes probably wouldn't have taken place and the markets generally would be less liquid today than they have turned out to be.


So I think the success of the multi- platform environment hasn't necessarily been the shift of business between the platforms, but it has been the fact that there is an electronic business at all, given the problems over the last six months. The business is firmly back up on the platforms because of these associated rule changes





that probably otherwise wouldn't have been implemented. Do you think that's a fair statement?


Wilders: I think we would have seen changes and I agree with you that it's easier to discuss the changes in the context of the primary dealers. I am the issuer and I am asking something from the primary dealers. I am trying to give them something in return, so it helps to have those discussions with the primary dealers. I think the first steps were already under


way in the MTS galaxy, although discussion was a bit more difficult there than discussions directly with the primary dealers. In that respect, I think it helps that we have direct communication with our primary dealers, so we can decide something together and that's separate from the question of the electronic trading platforms.


I also strongly believe that competition between platforms will generate innovation and I hope that in the end that will help liquidity. That was a strong


motivation for us to look at changing the landscape to allow more than one platform. I think the benefits from having competition are much larger than the risk of reducing the liquidity on our bonds. So at this point I think we are going in the right direction, but there is still a lot which needs to happen. There is a strong belief that this will change the landscape and then we will see which will be the prevailing outcome for a while again and then, after a few years, it will change again. But I think this will help change things at this moment, and in that respect the timing is good. We considered whether the timing was bad to change now, but following discussions with the primary dealers, who were busy at their desks, et cetera, we decided to proceed. In the end it is always a lousy time for someone, although it is better to look at it from a positive point of view. We started thinking about implementing changes two years ago and who could predict what the market would be like at this point. So like your story, it is always a good time.


The success of the multi-platform environment hasn’t necessarily been the shift of business between the platforms, but it has been the fact that there is an electronic business at all, given the problems over the last six months.





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