Title:

How Post-2008 Financial Regulations Impacted Corporate Bond Liquidity, No. 22-05

PREVIOUS | NEXT

How Post-2008 Financial Regulations Impacted Corporate Bond Liquidity, No. 22-05

DATE: February 2022

View Brief

View Appendix

PART OF: AUTHORS: CONTRIBUTING AUTHOR:

ABSTRACT: We review empirical findings regarding the impact of post-2008 financial regulations on the liquidity of corporate bond markets in the U.S. We first show that traditional measures of market liquidity improved in recent years. At the same time, the cost of illiquidity also increased. We then discuss findings showing that — after the regulations were implemented — dealer capital commitment, trade frequency and size decreased, while dealer bid-ask spread increased. The increase in dealer bid-ask spread is compensated by a change in the composition of the liquidity provision. Liquidity is increasingly being provided by customers instead of dealers.

Download (pdf) View Full Text

Share this page:


Diversity is critical to the Federal Reserve, and we are firmly committed to fostering a diverse and inclusive culture throughout the Federal Reserve System. Collections within FRASER contain historical language, content, and descriptions that reflect the time period within which they were created and the views of their creators. Certain collections contain objectionable content—for example, discriminatory or biased language used to refer to racial, ethnic, and cultural groups. These viewpoints and attitudes are inconsistent with our values, but the original descriptions are retained to ensure that they are not erased from the historical record.
Save & Share
less

Dyskant, Lucas , Silva, André C. , Sultanum, Bruno and Federal Reserve Bank of Richmond. "How Post-2008 Financial Regulations Impacted Corporate Bond Liquidity, No. 22-05," Economic Brief (February 2022). https://fraser.stlouisfed.org/title/6034/item/610918, accessed on August 8, 2022.

More Information
less

THEMES:

Metadata (XML)
Metadata (JSON)