New sources of corporate bond liquidity emerging

Institutional investors have confirmed that much-reduced dealer inventories of corporate bonds is the “new normal” in Europe and the US, and agree this poses risks to their portfolios, according to a new Greenwich Associates survey.*  But the study also shows that most (57%) of buy-side firms consider themselves a viable source of additional corporate bond liquidity and 55% believe this could offset the reduction in dealer-provided liquidity.  “With its outsized portfolio of cor…