What's Driving Dealer Balance Sheet Stagnation?

Tobias Adrian, Michael Fleming, Daniel Stackman and Erik Vogt

No 20150821, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Securities brokers and dealers (“dealers”) engage in the business of trading securities on behalf of their customers and for their own account, and use their balance sheets primarily for trading operations, particularly for market making. Total financial assets of dealers in the United States have not shown any growth since 2009. This stagnation in their balance sheets raises the worry that dealers’ market-making capacity could be constrained, adversely affecting market liquidity. In this post, we investigate the stagnation of dealer balance sheets, focusing particularly on the boom and bust of the housing market.

Keywords: balance sheet growth; security brokers and dealers (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2015-08-21
New Economics Papers: this item is included in nep-acc and nep-mst
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Citations: View citations in EconPapers (4)

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