The European bond market is made up of many segments characterised by varying levels of liquidity and of pre- and post-trade transparency. The possibility of extending the transparency provisions envisioned in the Directive 2004/39/EC, disciplining the functioning of markets in financial instruments in Europe (MiFID), from the equity to the bond market is currently being discussed. This poses risks to the status quo through trading fragmentation and strong negotiating power of a few large dealers, particularly with respect to small retail investors. The main conclusion of the paper is that if MiFID transparency rules are to be extended to the bond market, this must be "real" transparency, meaning pre-trade dissemination of real-time executable prices and a transparent order book. Under current provisions, this kind of information is available if not directly to everybody, at least directly to dealers and indirectly to professional and retail clients through business-to-business electronic platforms

Paesani, P., & Piga, G. (2007). Transparency in the European bond market. TRANSITION STUDIES REVIEW, 14(1), 3-21 [10.1007/s11300-007-0137-0].

Transparency in the European bond market

PAESANI, PAOLO;PIGA, GUSTAVO
2007

Abstract

The European bond market is made up of many segments characterised by varying levels of liquidity and of pre- and post-trade transparency. The possibility of extending the transparency provisions envisioned in the Directive 2004/39/EC, disciplining the functioning of markets in financial instruments in Europe (MiFID), from the equity to the bond market is currently being discussed. This poses risks to the status quo through trading fragmentation and strong negotiating power of a few large dealers, particularly with respect to small retail investors. The main conclusion of the paper is that if MiFID transparency rules are to be extended to the bond market, this must be "real" transparency, meaning pre-trade dissemination of real-time executable prices and a transparent order book. Under current provisions, this kind of information is available if not directly to everybody, at least directly to dealers and indirectly to professional and retail clients through business-to-business electronic platforms
Pubblicato
Rilevanza internazionale
Articolo
Nessuno
Settore SECS-P/01 - Economia Politica
English
bond market; financial regulation; transparency
Paesani, P., & Piga, G. (2007). Transparency in the European bond market. TRANSITION STUDIES REVIEW, 14(1), 3-21 [10.1007/s11300-007-0137-0].
Paesani, P; Piga, G
Articolo su rivista
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2108/43714
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