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lesson number
 13
 
Matching systems.

 Unlike dealing systems, on which trading is not anonymous and is conducted
on a one-on-one basis, matching systems are anonymous and individual traders deal against the
rest of the market, similar to dealing in the brokers' market.

 However, unlike the brokers' market,
there are no individuals to bring the prices to the market, and liquidity may be  limited at times.
Matching systems  are well-suited for trading smaller amounts as well. The  dealing systems'
characteristics of speed, reliability, and safety are replicated in the matching systems. In addition,
credit lines are automatically managed by the systems.

 Traders input the total credit line for each
counterparty. When the credit line has been reached, the system automatically disallows dealing
with the particular party by displaying credit restrictions, or shows the trader only the price made
by banks that have open lines of credit.

As soon as the credit line is restored, the system allows
the bank to  deal again. In the inter-bank market, traders deal  directly with dealing systems,
matching systems, and brokers in a complementary fashion.
 
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