ROUNDTABLE - Searching for liquidity in a shrinking pool

Chris Hall: How have structural changes to the corporate bond markets over the last 12-18 months impacted the buy-side’s ability to access liquidity? Nick Cox: We’re seeing a recalibration of trading costs, rather than a liquidity crisis. It might not be all encompassing, but one definition of liquidity is: can I trade in the size that I need, at a price I can accurately predict? Some strategies are not viable in current conditions because the alpha gets eaten up by transaction costs, whereas others have become more attractive. If you have a degree of certainty on costs, you can manage your liquidity appropriately.