This Chart Helps Explain the Bond Market Liquidity Story
There's very little incentive to trade.
Traders work on the floor of the New York Stock Exchange in New York City.
Photographer: Eric Thayer/Getty ImagesThis article is for subscribers only.
While investors, traders and analysts often point to new financial regulation as one explanation for the lack of liquidity in the corporate bond market, there is an arguably more salient explanation for the trend.
Years of low interest rates have sparked an intense scrum for bonds. Hearty investor demand has helped propel the primary market in which companies sell their debt, from $5.4 trillion at the end of 2008 to almost $8 trillion now. (That's just in the U.S.)
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This Chart Helps Explain the Bond Market Liquidity Story