Scotiabank has resigned as a primary dealer of British government debt, the Debt Management Office said on Thursday, the latest financial services firm to have given up the role in recent years.
Primary dealers are banks that buy bonds, known in Britain as gilts, directly from the government to sell them on, helping to create a liquid market.
Although regarded as a prestigious role for banks, tougher regulation since the financial crisis has made primary dealing less profitable due to the extra capital that banks now have to hold against possible losses.
Scotiabank joins Credit Suisse and Societe Generale among major banks to have quit as primary dealers of British gilts in recent years.
“The UK Debt Management Office (DMO) is announcing that it has today accepted the resignation of Scotiabank Europe plc as a Gilt-Edged Market Maker (GEMM) in both the conventional and index-linked gilt sectors,” the DMO said in a statement.
The resignation takes effect from Friday, it said, leaving 15 remaining wholesale primary dealers of gilts.
Scotiabank was not immediately available for comment.