It is a crucial time for the rates business. With many eurozone sovereigns in crisis mode and government debt in the developed world at eye-watering levels, now is not the time to have an underweight rates business. Estimates suggest that in 2012, the US Treasury will issue some $2096bn of debt, eurozone supply will amount to about €739bn, and Japan will issue about Y112,000bn ($1443bn).
Three and a half years ago, Citi would likely have missed out on the huge amount of activity that sovereign debt desks are witnessing as a result. In that period, however, it has managed to transform a surprisingly weak rates offering into an increasingly powerful platform. Now, it is the only US bank that is a primary dealer in every European government bond market. “If it's G-10, then we're in it,” says Andrew Morton, head of G-10 rates, risk treasury and finance at Citi.