Frontpage News 2016 Worrying liquidity...

Worrying liquidity on the bond market

22 August 2016

The Danish Securities Dealers Association and the Danish Bankers Association have investigated how the country’s largest investors experience liquidity on the bond market.
The tendency is clear: the development is declining and worrying. Large liquidity on the bond market is crucial for the mortgage market to be effective and for debtors to receive the best financing.

“We can see a worrying development on the bond market. We must take large investors’ messages very seriously,” says the Danish Securities Dealers Association’s board member and CEO of Jyske Bank Markets, Peter F. Andersen.

Investors described in the study that ten years ago they could trade for up to DKK 1 billion in the space of a few minutes, without significantly changing the market price. Whereas today, they cannot trade for more than DKK 100 million, if the transaction is to be completed on the same day without changing the market price.

The Danish Securities Dealers Association proposed a number of resolutions to strengthen liquidity in the report. The sector has, in part, several wishes to politicians, but will also gladly lead the way and draft proposals that will benefit liquidity.

Amongst other things, the report proposes to reduce the number of open mortgage product lines, that a higher level of CCP clearing should be used and that the law on refinancing should be changed.
 
Read the full report here (in Danish).
 
Further information:
Head of Media Relations at the Danish Bankers Association, Stine Luise Hansen
Tel.: +45 3316 1009
E-mail: slh@finansraadet.dk
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