Barclays (BCS) intends to stop trading legacy mortgage bonds, leaving behind a $700 billion market, Bloomberg reported Wednesday.
From the Bloomberg report:
The firm no longer will regularly buy and sell the residential securities, which lack government backing, according to Adam Yarnold, the bank’s head of securitized-product trading in the U.S. No traders will lose their jobs because its securities arm is allocating resources to other businesses, he said.
“This is a refinement to our strategy meant to improve our return on equity,” Yarnold said in a telephone interview.
According to the Bloomberg report, Barclays will instead focus on “making markets” in other non-agency mortgage bonds, citing the higher ratings of recent debt as compared to legacy debt.
