Wall Street Dealers Are Increasingly Middlemen, Coalition Says
- Bond dealers acting more as brokers, Coalition Greenwich says
- Technological, regulatory shifts reshape dealer business model
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Wall Street dealers are holding significantly fewer bonds on their balance sheets while trading more of the securities, as technological advances and regulatory changes transform their role in the U.S. government and corporate debt markets, according to Coalition Greenwich.
Dealer holdings of corporate bonds slid 77% from 2017 through the end of 2022 to $3.6 billion, while their average daily trading volume grew 29% to $37.7 billion, the financial services consulting firm said in a report Tuesday. During the same period, dealer daily transaction volume of US Treasuries jumped 22%, while their net holdings of government debt stayed roughly flat.