SUERF BAFFI Bocconi e-Lecture

Fixed Income Market Liquidity: Where do we stand?

Mar 03, 2022 15:00 - 16:30 CET (UTC+01:00)

Two years after the US Treasury market dislocation in March 2020, the purpose of this webinar is to discuss the resilience of the liquidity in major bond markets (cash, repo, swaps and futures) and the policy work underway. This segment of the global financial system is seeing steadily rising importance due to e.g. sharply increasing issuance (e.g. the EU’s Nexgen programme) but has also faced major stress events in recent years. Against this backdrop key issues for discussion are:

• To what extent is the current decentralized market structure, which heavily relies on bank Dealers, still up to the growing challenges?
• What can policy makers do to foster market liquidity? Where does the ongoing reform process in US markets stand?
• What is the impact of long-term structural trends on resilience of market liquidity: Low rate environment, growing electronic trading, declining role of bank Dealers and rising role of non-bank intermediaries such as Principal Trading firms?
• Do major bond markets need a permanent “Dealer of last resort”?
• What is the European perspective on bond market liquidity, also in the light of the work towards a Capital Markets Union?

Presentation slides (pdf), as far as available, are posted here:

Fixed income market liquidity: Where do we stand? An overview of the main issues
Martin Scheicher, Adviser in the DG Horizontal Line Supervision of the Single Supervisory Mechanism

Panel moderated by Cornelia Holthausen, DG Macroprudential Policy and Financial Stability, ECB 

The US Treasury market: March 2020 dysfunction and G30 policy proposals (pdf)
Darrell Duffie, Graduate School of Business, Stanford University

Fixed income market liquidity: Where do we stand?
Matt Andresen, CEO, Headlands Technologies, LLC

Market liquidity and systemic risk
Andreas Schrimpf, Bank for International Settlements & CEPR