Document Type

Thesis or dissertation

Date of this Version

5-6-2019

Advisor

Christian Opp

Abstract

Using data from all U.S. corporate bond transactions in 2008, intermediation chains are identified. Dealer centrality and past experience are used as proxies for the amount of information that a dealer has about the valuation of a given bond. It is shown that dealers that are closer together on a given intermediation chain are also expected to have closer levels of information. These relationships hold for both investment grade bonds and junk bonds, as well as both before and after the onset of the 2008 financial crisis. This implies that intermediation chains in an over-the-counter market can be an effective way of responding to the presence of high information asymmetries between dealers, end buyers, and end sellers.

Keywords

corporate bonds, market design, information asymmetry, networks, over-the-counter markets, interdealer networks, intermediation chains

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Date Posted: 14 October 2019

 

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