The investment management company BlackRock calls the bond market “broken” and in need of reform.
According to an article by Bloomberg, the “firm’s suggested overhaul includes unseating banks as the primary middlemen in the market and shifting transactions to electronic markets. Another solution is reducing complexity by encouraging corporations to issue debt with more standardized terms.” These reformations would lead to a more “modernized” bond market.
Currently, banks and big dealers have powerful control over the bonds market. BlackRock hopes to make the trading system more transparent and create a direct interaction between dealers and customers.
Improving liquidity in the bonds market and reducing its complexity could also strengthen the bonds economy against market stresses and make it less volatile.
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