Tuesday, May 26, 2015

Bond liquidity

Dear Buy-side. You seem very concerned about liquidity. Can I suggest paying for it? — Bull Market — Medium: "What needs to happen? Basically, the buy side needs to face up to reality. It needs to start looking at its cost of execution in the long run, rather than on a transaction-by-transaction basis, and understanding that if it prices the brokers out of business, it will have nobody left to make its trades. At present, the regulators aren’t helping with this at all — in a misguided attempt at consumer protection, they make it more or less impossible for a fund manager to make an investment in helping its counterparties. But really, the issue is with the clients themselves. If they want to keep on offering immediate liquidity to their investors (and they do), they need to stop creating the conditions under which that sort of immediacy is impossible for the market to provide."

'via Blog this'

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