Treasury Bond Traders Must Foster Liquidity or Face Regulation, Fed Says

(Bloomberg) -- Treasury traders were warned by the
Federal Reserve Bank of New York to abide by the spirit of
guidelines drafted this year to put an end to manipulative
trading practices or face additional regulation.

``If market participants are unable to behave in an
appropriate way consistent with the goal of maintaining a deep
and liquid Treasury market, such an outcome could provoke a
regulatory response at a later stage,'' said William Dudley,
executive vice president in charge of financial markets at the
New York Fed, during an industry conference today at the bank.


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