Monday, November 06, 2006

DrKW and Cross-Asset Trading

Dresdner folded its much-hyped Digital Markets division, which they liked to view as their "Bell Labs" of DrKW. All of the major players involved in the Digital Markets group have left or are in the process of leaving.

According to the DWT newsletter, there were several charters to the Digital Markets group:

1) Provide synergies across all lines-of-business at DrKW, and stop the siloing.
2) Provide a system for cross-asset class trading.

Eugene Grygo, the editor of the DWT newsletter, devoted his "Before the Spin" column to this news, and brought up some questions with regards to the future of DrKW. In particular, what will happen to the dream of cross-asset class trading? Grygo mentions that HSBC is actively exploring this space, and I know a few other IBs doing the same. Is it impossible to coalesce the silos and provide true cross-asset class trading? If it is technically feasible, then is it politically feasible?

In these times where everyone is predicting the reduction of traders due to automation, will cross-asset trading be the last field of battle as the silos struggle to maintain their autonomy?

I also wonder what becomes of DrKW's grid project. Maybe Matt or Deglan can illuminate us...

©2006 Marc Adler - All Rights Reserved

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