Barclays backs LSE's retail bond trading

Barclays Capital, the investment banking arm of Barclays Bank, is stepping up its involvement in a London Stock Exchange platform that allows private investors to trade in bonds. The bank will announce today that it is becoming a market maker for bonds listed on the LSE's electronic Order Book for Retail Bonds. ORB was launched in February 2010 and allows ordinary investors to buy and sell company and sovereign debt in the same way as they have long been able to trade in shares.

Pietro Poletto, the head of fixed income at the London Stock Exchange group, said: "Dedicated market makers such as Barclays Capital bring liquidity and depth to the market, which will only encourage further private investor participation".

Not everyone thinks it is appropriate for unsophisticated investors to be trading company debt. Mark Dampier of Hargreaves Lansdown said last year: "You need to understand senior and junior debt. You need to know where a bond is in the pecking order. If you look at bond fund managers, they've got analysts and lawyers looking at all the caveats."