Developing the exchange traded market for government bonds: Effect of recent quote rule changes in South Korea

Woon Wook Jang, Hak Kyum Kim and Yong Joo Kang

Finance Research Letters, 2016, vol. 19, issue C, 130-138

Abstract: The 2010 new quote rule changes imposed on the exchange market primary dealers (PDs) for the Korea Treasury Bonds (KTBs) have increased the exchange market quality for the 5-, 10- and 20-year maturity KTBs. Knock-on effects have subsequently led to an increase in market quality for the 5- and 10-year maturity bonds in the over-the-counter (OTC) KTB market. However, the imposition of a spread width below a reasonable level in the KTB exchange traded market for the 3-year maturity KTB has led to a significant reduction in trade volume in the OTC KTB market for bonds of the same maturity.

Keywords: Market microstructure; Exchange bond market; OTC bond market; Trading cost; Liquidity; Korea treasury bond (search for similar items in EconPapers)
JEL-codes: G10 G18 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:19:y:2016:i:c:p:130-138

DOI: 10.1016/j.frl.2016.07.004

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