Time to act - ICMA issues study on the state of the European investment grade corporate bond secondary market


4 March 2020 ICMA has today issued the third in its series of studies into the state and evolution of the European investment grade corporate bond secondary market. Based on quantitative market data, stakeholders surveys, as well as in interviews with market participants, the study looks at the current state of market liquidity; the evolution of market structure; and participants’ expectations for future developments in the market. It compares market conditions and developments since the previous 2016 study, as well as the 2017 reports of the European Commission’s Expert Group on Corporate Bond Markets.

The study concludes that secondary market liquidity conditions remain challenged, and have deteriorated since 2016. It also examines the key trends and developments in market structure over the past three years, including evolving market behaviour and the adoption of new trading protocols, as well as the impacts of regulation and monetary policy. Looking forward, it identifies potential opportunities through new technologies and the use of data, as well as further challenges to liquidity, not least as a result of higher capital charges for market makers, as a result of the Fundamental Review of the Trading Book (FRTB), and the implementation of the Central Securities Depositories Regulation (CSDR) mandatory buy-in regime. The report encourages policy makers, regulators, and stakeholders to build on the work undertaken by the European Commission’s Expert Group in order to prevent further declines in market liquidity and to ensure the continued development of Europe’s corporate bond market.

Download 'Time to act - ICMAs 3rd study into the state and evolution of the European investment grade corporate bond secondary market'.
ICMA Zurich

T: +41 44 363 4222
Dreikönigstrasse 8
8002 Zurich
ICMA London

T: +44 20 7213 0310
110 Cannon Street
London EC4N 6EU
ICMA Paris

T: +33 1 70 17 64 72
62 rue la Boétie
75008 Paris
ICMA Hong Kong

T: +852 2531 6592
Unit 3603, Tower 2
Lippo Centre
89 Queensway, Admiralty
Hong Kong
Copyright © 2021 International Capital Market Association.