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Pressure builds for a revamp of US Treasuries market


The $22tn US Treasury market is ill-equipped to finance whatever US spending packages are finally delivered by Congress. The administration and market regulators know that, and are preparing to formally develop a new market structure.

Work has started even before the Federal Reserve board has confirmed (or reconfirmed) the next chair and vice chair. Officials including Nellie Liang, the under secretary of the Treasury for domestic finance, and Gary Gensler, chair of the Securities and Exchange Commission, have already been laying out preliminary sketches.

Their shared concept is to shift to a market where the liquidity is provided by a diversity of large and small participants, rather than a couple of dozen “primary dealers” and 50 big hedge funds.

As Gensler put it this week: “The principle is something that humankind has understood since antiquity. If you bring vendors into a public square and they compete selling apples, it’s clear what…

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