Twenty Four AM's Bowie: How to tackle the bond liquidity crisis

Corporate bond 'eBay' could help

Twenty Four Asset Management's Chris Bowie has detailed ways liquidity in the corporate bond markets could be improved over the next few years, but warned the issue will remain a concern for "a long time".

The RBS Liquid-O-Meter, an index of trading volumes, dealer inventories, on/off-the-run and bid-ask spreads, shows that US credit trading liquidity has declined more than 90% since 2008. Will the lack of bond liquidity be the straw that breaks the camel's back? Although many fear liquidity will shrink further, Bowie (pictured) said he thinks it has hit a trough, but is "likely to stay poor for a long time". However, he is hopeful a number of factors could ease liquidity constraints. Bowie said: "Over the past few years, technology has led to bonds being able to be traded electro...