Journal of Monetary Economics 2017 DOI: 10.1016/j.jmoneco.2017.03.011 View full text
Tobias Adrian, Nina Boyarchenko, Or Shachar

Abstract: Do regulations decrease dealer ability to intermediate trades? Using a unique data set of dealerbond-level transactions, we link changes in liquidity of individual U.S. corporate bonds to dealers' transaction activity and balance sheet constraints. We show that, prior to the financial crisis, bonds traded by more levered institutions and institutions with investment-bank-like characteristics were more liquid but this relationship reverses after the financial crisis. In addition, institutions that face more reg…

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