with David Sloth (Nykredit Markets)
Why do customers in OTC markets form long-term relationships with dealers? Using data from a large European dealer, we find that customers with strong relationships receive lower bid-ask spreads and more frequent quotes. Salespeople play a key role in maintaining these relationships across all asset classes.
I study the role of reference prices in U.S. corporate bonds. These prices improve liquidity and reduce dealers' market power but may increase transaction costs due to biased inputs.