Bond Market’s Toughest Problems Go Unresolved
Regulators leave issues of credit-rating conflicts and trade transparency largely untouched.
Knotty problems.
Photographer: Sean Gallup/Getty Images
The U.S. Securities and Exchange Commission’s Fixed Income Market Structure Advisory Committee met earlier this week by webcast. For those in the bond markets who might have missed it, it’s worthwhile to briefly note the takeaways from the group’s virtual get-together.
To make a long story short, regulators punted yet again on some of the credit market’s thorniest issues. For one, don’t expect significant changes anytime soon to longstanding complaints about conflicts of interest in the “issuer pay” model of the ratings business. Also, forget about experimenting with the right balance of liquidity and transparency in corporate-debt trading.