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Corporate bond markets
The Board of the International Organization of Securities Commissions (IOSCO) is publishing its report on corporate bond markets – drivers of liquidity during COVID-19 induced market stresses and invites stakeholder feedback on the analysis.
The corporate bond analysis provides the broader context on the underlying markets that buyside investors such as ETFs and traditional open-ended funds increasingly invest in. These markets have grown exponentially since the Global Financial Crisis. The COVID-19 induced market stress highlighted the potential systemic significance of disorderly corporate bond trading and liquidity dysfunction. While market dynamics are evolving with new entrants such as ETFs and increased electronification, secondary corporate bond trading remains mostly reliant on a small network of OTC dealers in markets that remain fairly illiquid.
The March 2020 events raised questions about market-functioning and whether improvements could be made to bolster liquidity and alleviate supply side constraints in stress.
more at IOSCO