Citi dispands proprietary trading unit

Citi Building Canary Wharf

Citigroup disbanded a team of traders who used the bank’s own money to make bets in U.S. Treasury and agency bond markets, according to a person briefed on the move.

Bloomberg News reports that the team, run by Anna Raytcheva and known internally as the strategic-trading desk, was shuttered as market opportunities began drying up, the person said, asking not to be identified talking about internal deliberations.

The bank decided that resources would be better deployed in businesses that serve clients, the person said. At the same time, issuance of one type of security the desk traded, collateralized mortgage obligations, has dropped this year.

The handful of employees affected have moved to other roles at Citigroup, and Raytcheva is expected to stay at the bank as well, the person said. Reached by telephone, she declined to comment on the company’s decision.

Raytcheva had a rare mandate after much of Wall Street shut down proprietary-trading teams in the wake of new rules limiting the once-lucrative business. Treasuries, U.S. agency securities and derivatives are exempt from those limits. Mortgage traders have found it more difficult to make money in recent years, partly because the Federal Reserve’s quantitative-easing program, which involved buying and holding such debt to help stimulate economic growth, has contributed to a plunge in daily trading volume.

To access the complete Bloomberg News article hit the link below:

Citigroup Said to Disband Raytcheva’s Proprietary-Trading Team

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