Machines in Credit Trading Being Embraced at UBS

“UBS AG is a Swiss global financial services company, incorporated in the Canton of Zurich, and co-headquartered in Zürich and Basel. It is the biggest bank in Switzerland, operating in more than 50 countries with 59,387 employees around the world, as of 2016.

The Swiss bank is testing a computer program that will price and trade some inquiries received by its bond desk — which are typically for smaller, so-called odd lots for high-grade bonds. The bank recently hired Gokul Chebiyam, who previously helped found a machine-learning corporate bond startup, to its investment-grade credit trading team.

UBS would be joining other banks who’ve been tinkering with this technology and seeking to expand it to a broader set of corporate bonds. Notably, Goldman Sachs has experimented with its Goldman Sachs Algorithm, a program that allows investors to trade U.S. corporate bonds without having to communicate with a human at the bank.

This new technology can revolutionize credit trading, as well as take away many jobs from the middle class. Its uptake by banks has raised questions as to whether traders will be automated out of a job. For many, the challenge of trading bigger bond orders is also a reason algorithms won’t necessarily pave the way for extinction of humans on the trading desk.

Also, the reliability of the computers has a big impact on this new field. A lot of trust is built between a human banker and a human customer. A lot of people may feel unsafe “talking to and negotiating” with computers. Let’s see how this turns in a positive or negative way, and if UBS’ idea will become the next form of credit banking.”



Bloomberg News. 27 Mar. 2018,


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