CLO Liquidity Provision and the Volcker Rule: Implications on the Corporate Bond Market (Paperback) (ISBN-13: 9783961467396)

Although it is a highly desirable feature for securities markets in order to thrive, sufficient liquidity is barely recognized when being present. This study analyzes often neglected market liquidity in the corporate bond market after the introduction of comprehensive financial regulation in the USA, foremost associated with the Volcker Rule. Research identifies an increasing share of customer liquidity provision to be a reason for an underestimation of overall transaction costs, as spreads charged by customers are lower compared to market-makers' spreads. With customers providing liquidity where market-makers do not, the overall spread averages decrease. The author applies this research results to collateralized loan obligations (CLOs) and the corporate bond market. This approach is new, since it directly tests the growth of liquidity provision by CLOs as non-Volcker affected vehicles replacing restricted market-makers.

Author: Viktoria K. Klaus
ISBN-10: 3961467390
ISBN-13: 9783961467396
Publisher: Diplomica Verlag
Language: English
Published: 12/09/2019
Pages: 102
Format: Paperback
Weight: 0.29lbs
Size: 8.27h x 5.83w x 0.21d