Calmer markets should lead to better transparency however, streaming dealer prices in the corporate bond market today do not reflect traded prices as accurately as the buy side would like.
In March markets became dysfunctional and despite encouragement from banks towards direct, bilateral trading the sell-side proved cautious in trading on risk when faced with such volatility. In July, post-crisis, buy-side traders still see spreads, liquidity and transparency in the European corporate bond market as weaker than in February, notably in the Sterling investment grade market.
Sharon Ruffles, head of fixed income trading at State Street Global Advisors, says that initiatives like the proposed European consolidated tape would improve, but not solve, the transparency challenge. Her firm is using new trading protocols such as portfolio trading along with traditional voice trading and depth of experience to support investors in these challenging markets.