EFAMA is appreciative of the opportunity to comment on this major IOSCO study on the dynamics of bond market liquidity during market stresses.  We provide some detailed responses below, but would reiterate a few high-level points here:

• The analysis could better reflect the different public policy responses in Europe and the US, given that the timing and duration of major central bank interventions were not aligned.
• The unique nature of the health crisis and the ensuing policy response should be reflected in the analysis, and clear distinction made between this crisis and other external shocks.
• We see a natural area for further analysis on the role of ETFs in FI markets during the crisis.
• A consolidated tape for bonds would provide greater transparency which is particularly important in times of market volatility, for market participants but also for regulators for market surveillance purposes.
• We see important potential in all-to-all trading, standardization and electronification of trading.  Yet the impact today is still limited to improving diversity of trading platforms more than increasing available liquidity.
• Some post-GFC policies we believe exacerbated the liquidity squeeze during the Covid crisis and would benefit from a review: bank capital rules, and ‘dash for cash’ effect made worse by margining requirements that do not recognise a broad enough list of eligible collateral.