Wall Street’s credit-derivatives traders, who before the
financial crisis commanded $2 million of annual pay, are being replaced by
machines as banks cut costs and heed new regulations, Bloomberg told us.
UBS, Switzerland’s biggest bank, fired its head of credit-default
swaps index trading, David Gallers, last week, with no plan to fill the
position, according to two people familiar with the matter. Instead, the bank
replaced Gallers with computer algorithms that trade using mathematical models,
said the people, who asked not to be identified because moves are private.
UBS joins Barclays, Credit Suisse Group, and Goldman Sachs in using computer programs
to trade financial instruments that once generated some of their biggest fees.
With regulators preparing rules under the 2010 Dodd-Frank financial reform that
will push swaps toward exchange-like systems to improve transparency, credit
dealers are going digital as automated trading makes humans too expensive….
Want to know more?
Check out http://www.bloomberg.com/news/2012-11-06/million-dollar-traders-replaced-with-machines-credit-markets.html
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