Nomura Holdings Inc., Japan's largest securities firm, will cease making markets for Treasuries and close its Chicago office as it reorganizes operations in the U.S. Nomura hasn't decided yet whether it will keep its status as a primary dealer, spokesman Michiyori Fujiwara said in an interview today. Market makers agree to buy or sell Treasuries to ensure investors can always trade the notes. Primary dealers are the Federal Reserve's counterparties in its open market operations and are expected to bid at Treasury debt sales. ``The interest-rate market is going through some difficult times,'' said Thomas Lam, a treasury economist at United Overseas Bank Ltd. in Singapore. ``It suggests there is some kind of shake-up going on and that in the next few years the structure of fixed-income departments might be different.'' ABN Amro Holding NV in September last year became the first to give up the primary dealer designation since April 2002, citing its decision to expand in other markets including commodities and structured credit. CIBC World Markets Corp. withdrew in February, leaving 21 institutions who trade Treasuries directly with the Fed. Mergers and the growth of electronic trading, which has reduced the profitability of Treasury trading, have eroded the ranks of primary dealers over the past two decades. At the peak in 1988, there were 46. http://www.bloomberg.com/apps/news?pid=20601087&sid=aJENQMkCOAi4&refer=home Ooppss...the next one
Who's next to leave?.......UBS. Who's next to join the club?........a big bank from China. We'll see.