CLO Liquidity Provision and the Volcker Rule: Implications on the Corporate Bond Market - Paperback >
/ CLO Liquidity Provision and the Volcker Rule: Implications on the Corporate Bond Market - Paperback

CLO Liquidity Provision and the Volcker Rule: Implications on the Corporate Bond Market - Paperback

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by Viktoria K. Klaus (Author)

Although it is a highly desirable feature for securities markets in order to thrive, sufficient liquidity is barely recognized when being present. This study analyzes often neglected market liquidity in the corporate bond market after the introduction of comprehensive financial regulation in the USA, foremost associated with the Volcker Rule. Research identifies an increasing share of customer liquidity provision to be a reason for an underestimation of overall transaction costs, as spreads charged by customers are lower compared to market-makers' spreads. With customers providing liquidity where market-makers do not, the overall spread averages decrease. The author applies this research results to collateralized loan obligations (CLOs) and the corporate bond market. This approach is new, since it directly tests the growth of liquidity provision by CLOs as non-Volcker affected vehicles replacing restricted market-makers.

Author Biography

Viktoria K. Klaus, M. Sc. was born in Princeton, NJ in 1995. During her Bachelor studies with focus on banking in Stuttgart, she developed her interests in financial markets. To deepen her statistical knowledge Klaus finished her master's degree at the Catholic University Eichstätt-Ingolstadt in 2018. Following her research interests in financial regulation she started an audit trainee program focusing on capital market related topics at a German bank in 2019.

Number of Pages: 102
Dimensions: 0.21 x 8.27 x 5.83 IN
Publication Date: December 11, 2019
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