Panellists at FIX Paris said the proliferation of credit axes comes as a result of platforms rating liquidity providers on the basis of the number of axes they stream, rather than actual liquidity quality.

Sell-side and buy-side panellists at FIX Paris voiced concerns about the use of dealer axes on electronic platforms as an indicator of liquidity. They noted that the volume can create a misleading impression of credit liquidity as it does not reflect inventory led liquidity provision and in some instances, it can reward flows towards the wrong counterparties. They argued that current tools and workflows put too much emphasis on the number of axes displayed by liquidity providers, rather than whether those indications reliably translate into trades. read more…