Information and Core-Periphery Structure in Over-the-Counter Markets

Nicholas Trachter

Richmond Fed Economic Brief, 2022, vol. 22, issue 23

Abstract: An over-the-counter (OTC) market is a market where investors trade any kind of asset without a central exchange. OTC markets can be quite large. For example, the OTC market for credit default swaps (CDS) exhibit a quarterly trade volume of over $2 trillion. A prevalent feature of most OTC markets — and in particular for the CDS OTC market — is that the trading network of market participants exhibit a core-periphery structure.

Keywords: Over-the-counter (OTC) Market; investors; centrality; heterogeneity; Information-Based Theory of Financial Intermediation (search for similar items in EconPapers)
Date: 2022
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