Bye-Bye Bond Dealers? Investor-to-Investor Trading Gains

The video discusses the evolving role of dealers in bond trading, highlighting a shift towards electronic systems that could potentially replace traditional intermediaries. It examines the impact of regulations and the challenges in achieving liquidity and market access. The discussion also touches on the need for a critical mass of participants to make electronic trading viable and the role of regulators in fostering transparency and efficiency in the market.

What is the primary change in the role of dealers in the bond market as discussed in the first section?

• They are focusing solely on new debt sales.

• They are using more of their own money to facilitate trades.

• They are acting more as matchmakers between investors.

• They are completely replaced by electronic systems.

How have regulations affected the corporate bond market according to the second section?

• They have shifted trading around new debt sales controlled by dealers.

• They have increased the dominance of hedge funds.

• They have reduced the involvement of mutual fund investors.

• They have eliminated the role of dealers.

What is a significant challenge in creating electronic trading systems for corporate bonds?

• Insufficient liquidity without the involvement of all major players.

• Lack of interest from investors.

• Over-reliance on traditional trading methods.

• Excessive regulation preventing innovation.

Why do regulators support the development of electronic trading systems?

• To reduce the number of trades.

• To eliminate the need for dealers.

• To foster price transparency.

• To increase the speed of transactions.

What role do hedge funds play in the corporate bond market as mentioned in the third section?

• They provide the majority of the market's liquidity.

• They are the primary buyers of new debt sales.

• They have no significant role in the market.

• They act as intermediaries between dealers and investors.