Centralizing Over-the-Counter Markets?

• 成果类型: Article
• 署名作者: Allen, Jason; Wittwer, Milena
• 署名单位: Bank of Canada; Boston College
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/725361
• 发表日期: 2023
• 页码: 3310-3351
• 关键词: DEALER INTERMEDIATION; TREASURY; microstructure; auction; demand; IMPACT

摘要

In traditional over-the-counter markets, investors trade bilaterally through intermediaries. We assess whether and how to shift trades on a centralized platform with trade-level data on the Canadian government bond market. We document that intermediaries charge a markup when trading with investors and specify a model to quantify price and welfare effects from market centralization. We find that many investors would not use the platform, even if they could, because it is costly, competition for investors is low, and investors value relationships with intermediaries. Market centralization can even decrease welfare, unless competition is sufficiently strong.