Wall Street’s Buying Less of Those Risky Junk Bonds It’s Selling
Risks Facing the Debt Markets: Volatility vs. Rates
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Credit trading just isn’t paying like in the old days. That’s why Wall Street dealers are putting less money at risk to broker the debt, and instead are matching buyers and sellers as much as they can before making trades.
Dealers are only acting as middlemen for about 60 percent of high-yield bond transactions bigger than $2 million, moving securities between two sides they already have lined up, according to data compiled by financial-research company Tabb Group LLC. Before the 2008 financial crisis, such trades accounted for an estimated 25 percent of their business.