TY - JOUR T1 - Liquidity in the U.K. Corporate Bond Market: <em>Evidence from Trade Data</em> JF - The Journal of Trading SP - 67 LP - 80 DO - 10.3905/jot.2017.12.4.067 VL - 12 IS - 4 AU - Matteo Aquilina AU - Felix Suntheim Y1 - 2017/09/30 UR - https://pm-research.com/content/12/4/67.abstract N2 - This article presents evidence on the evolution of liquidity in the U.K. corporate bond market for the 2008–2014 period. Based on a series of widely accepted liquidity measures, the authors document that there is no evidence that liquidity outcomes have deteriorated in the market, despite the decline in dealers’ inventory during this period. If anything, the market appears to have become more liquid in recent years. They also document that there is little evidence that liquidity is having a larger effect on bond spreads now than a few years ago. They do not find evidence that liquidity has become more “flighty” in response to shocks of a mild-to-moderate nature, as measures of liquidity risk do not increase over the period of analysis. However, they do not claim that there are no risks associated with liquidity. Their analysis shows that liquidity is subject to considerable deterioration if the market is under severe stress; there was considerably less liquidity in 2009–2010 than either before or after this period.TOPICS: Fixed income and structured finance, developed ER -