IDEAS home Printed from https://ideas.repec.org/a/rba/rbabul/mar2015-07.html
   My bibliography  Save this article

Market Making in Bond Markets

Author

Listed:
  • Jon Cheshire

    (Reserve Bank of Australia)

Abstract

In November 2014, the Committee on the Global Financial System (CGFS) published a report on developments in market making and proprietary trading in fixed income and related derivative markets (CGFS 2014). The aim of the report was to facilitate a better understanding of how ongoing changes in these activities may affect liquidity in markets and to assess whether these changes are driven by market or regulatory forces. The report found that there have been changes in liquidity conditions across markets, including in Australia, with market activity becoming more concentrated in the most liquid instruments and declining in less liquid ones. These changes in market-making activity have been driven by both market-based developments and regulatory change. To the extent that liquidity risks were underpriced in the period prior to the global financial crisis, many of the subsequent changes in market structure and the increase in liquidity premiums are welcome. However, with the changes still ongoing, bond issuers and investors will be likely to have to make further adjustments to the way in which they operate in fixed income markets and manage liquidity risks.

Suggested Citation

  • Jon Cheshire, 2015. "Market Making in Bond Markets," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 63-74, March.
    • Handle: RePEc:rba:rbabul:mar2015-07
    as

    Download full text from publisher

    File URL: https://www.rba.gov.au/publications/bulletin/2015/mar/pdf/bu-0315-7.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bobby Lien & Andrew Zurawski, 2012. "Liquidity in the Australian Treasury Bond Futures Market," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 49-58, June.
    2. Ivailo Arsov & Greg Moran & Ben Shanahan & Karl Stacey, 2013. "OTC Derivatives Reforms and the Australian Cross-currency Swap Market," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 55-64, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fiona Price & Carl Schwartz, 2015. "Recent Developments in Asset Management," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 69-78, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cerutti, Eugenio M. & Obstfeld, Maurice & Zhou, Haonan, 2021. "Covered interest parity deviations: Macrofinancial determinants," Journal of International Economics, Elsevier, vol. 130(C).
    2. Megan Garner & Anna Nitschke & David Xu, 2016. "Developments in Foreign Exchange and OTC Derivatives Markets," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 63-74, December.
    3. Bank for International Settlements, 2020. "US dollar funding: an international perspective," CGFS Papers, Bank for International Settlements, number 65, december.
    4. Belinda Cheung, 2014. "Trading in Treasury Bond Futures Contracts and Bonds in Australia," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 47-52, September.
    5. Chris Becker & Jonathan Lees & Andrew Zurawski, 2013. "Infrastructure Developments in the Market for Commonwealth Government Securities," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 47-54, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rba:rbabul:mar2015-07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paula Drew (email available below). General contact details of provider: https://edirc.repec.org/data/rbagvau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.