Sovereign bond market liquidity recovered strongly after the financial crisis, as suggested by several metrics (Graph 1).
Not exact matches
In
sovereign debt and, to an even greater degree, corporate
bond markets,
liquidity hinges in large part on whether specialised dealers («
market - makers») respond to temporary imbalances in supply and demand by stepping in as buyers (or sellers) against trades sought by other
market participants.
This feature article draws on recent work by the Committee on the Global Financial System (CGFS) to investigate trends in
market - making and what they mean for the financial system (CGFS (2014)-RRB-.2 We use a simple conceptual framework to assess how supply and demand for
liquidity have changed in fixed income
markets, particularly in
markets for
sovereign and corporate
bonds.
While
liquidity in the
sovereign bond market is back to conditions seen before the crisis, this is not the case in other segments of the fixed income
market.