The electronic evolution of corporate bond dealers

• 成果类型: Article
• 署名作者: O'Hara, Maureen; Zhou, Xing Alex
• 署名单位: Cornell University; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.01.001
• 发表日期: 2021
• 关键词: Electronic trading; Voice trading; RFQ; transaction costs; Execution quality

摘要

Technology transformed the trading of financial assets but has been slower to come to corporate bond trading. Combining proprietary data from MarketAxess with regulatory TRACE data, we investigate how electronic request for quote (RFQ) trading affects bond dealers and trading more generally. We demonstrate that electronic trading remains fairly small and segmented, but has wide-ranging effects on transaction costs and execution quality in both electronic and voice trading, and the interdealer market. We identify features particular to bond markets that have and could continue to limit electronic bond trading growth. We provide an intriguing portrait of a market in transition. (C) 2021 Elsevier B.V. All rights reserved.