Citadel Securities Credit-Trading Business Threatens Banks’ Turf

Wall Street banks bracing for more regulation are facing an increasing threat from electronic market-making firms able to capitalize on their pullback in fixed-income trading, Tradeweb Markets Inc.’s chief executive officer said.

“From my perspective, you’re going to have more of the Citadel Securities of the world and ecosystem entering into these markets,” Billy Hult said Tuesday at the Goldman Sachs US Financial Services Conference.

Delivering a fresh challenge to Wall Street banks in their own backyard, electronic trading firms including Ken Griffin’s Citadel Securities started making markets in corporate credit and other fixed-income products.

“Their arrival ...