Wall Street Dealers Become Bit Players in US Bond Sales
- Firms that once bought majority of bonds play far smaller role
- The dealers’ retreat seen contributing to reduced liquidity
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Wall Street bond dealers are moving rapidly to the sidelines of US Treasury auctions — the very activity that defines their status at the heart of the world’s biggest bond market.
Until 2008, the roughly two dozen “primary dealers” designated by the Federal Reserve Bank of New York had a virtual stranglehold on the distribution of new US government debt, capturing at least 60% of every 10-year note auction and usually more than 80%.