LiquidityHub acts as an aggregator for streaming prices for its 16 participating banks. The service is distributed by Reuters and Bloomberg. At launch 12 of LiquidityHub's 16 owners are fully operational participants.

Serving the dealer to client market, LiquidityHub's initial offering will focus on the vanilla euro IRS products. The next phase, expected later this quarter, will see the introduction of vanilla USD, IRS and US treasuries. European government bonds will be introduced during 2008.

Robert MacLeod, CEO of LiquidityHub, says the service "will play a crucial role in making e-trading a reality in the fixed income market".

"We believe we have a compelling proposition that will deliver tangible benefits to the market, offering enhanced pools of liquidity via aggregation of some of the market's leading players and industry leading technology such as the Request for Stream protocol (RFS)," says MacLeod. "The impetus for banks to deliver their product offering to clients online is increasing. While other financial markets and asset classes have moved towards an electronic environment, the interest rate swaps market has remained underdeveloped. The market conditions are now right for this market evolution to take place."

The new service challenges existing fixed income e-trading models such as TradeWeb, by facilitating liquidity distribution for its members. In this way, it should act as a counter to the increasing power exercised by third party dealing venues in the fixed income market.

Indeed, many of the banks involved in LiquidityHub - including Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland and UBS - recently acquired a minority stake in the TradeWeb platform, which they initially sold off to Thomson Financial in April 2004.