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The role of designated market makers in the new trading landscape

Author

Listed:
  • Evangelos Benos

    (Bank of England)

  • Anne Wetherilt

    (Bank of England)

Abstract

Designated market makers (DMMs) have traditionally been a source of liquidity for exchange-traded securities and financial contracts. Recent regulatory and technological developments, however, have changed the environment in which DMMs operate, raising questions about their place in the new trading landscape. This article discusses the role and challenges of DMMs in today’s trading venues.

Suggested Citation

  • Evangelos Benos & Anne Wetherilt, 2012. "The role of designated market makers in the new trading landscape," Bank of England Quarterly Bulletin, Bank of England, vol. 52(4), pages 343-353.
    • Handle: RePEc:boe:qbullt:0091
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    References listed on IDEAS

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    1. Michael J. Fleming, 2000. "The benchmark U.S. Treasury market: recent performance and possible alternatives," Economic Policy Review, Federal Reserve Bank of New York, issue Apr, pages 129-145.
    2. Venkataraman, Kumar & Waisburd, Andrew C., 2007. "The Value of the Designated Market Maker," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 42(3), pages 735-758, September.
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    7. Johannes A. Skjeltorp & Bernt Arne Ødegaard, 2010. "Why do firms pay for liquidity provision in limit order markets?," Working Paper 2010/12, Norges Bank.
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    Cited by:

    1. Nicola Anderson & Joseph Noss, 2013. "Financial Stability Paper No 23: The Fractal Market Hypothesis and its implications for the stability of financial markets," Bank of England Financial Stability Papers 23, Bank of England.
    2. Antoine Bouveret & Mr. Peter Breuer & Ms. Yingyuan Chen & David Jones & Tsuyoshi Sasaki, 2015. "Fragilities in the U.S. Treasury Market: Lessons from the “Flash Rally” of October 15, 2014," IMF Working Papers 2015/222, International Monetary Fund.
    3. Geir-Are Karvik & Joseph Noss & Jack Worlidge & Daniel Beale, 2018. "The deeds of speed: an agent-based model of market liquidity and flash episodes," Bank of England working papers 743, Bank of England.
    4. Kushal Balluck, 2015. "Investment banking: linkages to the real economy and the financial system," Bank of England Quarterly Bulletin, Bank of England, vol. 55(1), pages 4-22.
    5. Panayi, Efstathios & Peters, Gareth W. & Danielsson, Jon & Zigrand, Jean-Pierre, 2018. "Designating market maker behaviour in limit order book markets," Econometrics and Statistics, Elsevier, vol. 5(C), pages 20-44.

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