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Primary Dealers in Government Securities Markets


  • Robin McConnachie


This introductory Handbook first describes the main functions of what are commonly called primary dealers in the government securities markets. It sets out the advantages of primary dealer systems to the authorities running these markets (usually the Ministry of Finance and the Central Bank) and explains what the authorities may have to concede to secure the benefits. It analyses which of these considerations may be most relevant in deciding whether or how to develop a system of primary dealers. The analysis would be applicable to any economy, although these questions may currently be most pressing in some of the countries in transition towards a market economy. The Handbook does not specifically deal with the role of financial intermediaries in money markets, as opposed to securities markets, although, particularly in a developing market economy, there may be a fair degree of overlap between these two markets, so that some of the argumentation here could apply equally to the role of specialist financial intermediaries in money markets. This handbook is also available in Russian and Spanish.

Suggested Citation

  • Robin McConnachie, 1996. "Primary Dealers in Government Securities Markets," Handbooks, Centre for Central Banking Studies, Bank of England, number 6.
  • Handle: RePEc:ccb:hbooks:6

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    References listed on IDEAS

    1. Merton, Robert C, 1974. "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates," Journal of Finance, American Finance Association, vol. 29(2), pages 449-470, May.
    2. Baz,Jamil & Chacko,George, 2004. "Financial Derivatives," Cambridge Books, Cambridge University Press, number 9780521815109, March.
    3. Durbin, James & Koopman, Siem Jan, 2012. "Time Series Analysis by State Space Methods," OUP Catalogue, Oxford University Press, edition 2, number 9780199641178.
    4. Sidanius, Che & Zikes, Filip, 2012. "Financial Stability Paper No 18: OTC derivatives reform and collateral demand impact," Bank of England Financial Stability Papers 18, Bank of England.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Adigozalov, Shaig & Huseynov, Salman, 2015. "İnflyasiya hədəflənməsinin əməliyyat çərçivəsi: ölkə təcrübələri AMB üçün nə vəd edir?
      [Operational framework of Inflation Targeting: what promises do country experiences make to the CBAR?]
      ," MPRA Paper 76349, University Library of Munich, Germany.

    More about this item


    Dealers; Government; Securities; Markets;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies


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