Informed trading in parallel bond markets

Abstract

In this paper we investigate the presence of asymmetric information in the parallel trading of ten-year government xed rate bonds (BTP) on two secondary electronic platforms: the business-to-business (B2B) MTS platform and the business-to-customer (B2C) BondVision one. The two platforms are typied by a dierent degree of transparency. We investigate whether the probability to encounter an informed trader on the less transparent market is higher than the corresponding probability on the more transparent one. Our results show that on BondVision, that is the less transparent platform, the probability of encountering an informed trader is higher. Finally we perform a series of tests to check the robustness of our estimates. Two tests do not meet the hypothesis of independence. Nevertheless, these ndings do not controvert the hypothesis of our model, but call for further analysis.

Tunisian corporate bond market liquidity: a qualitative approach

“…In the OTC market, trade occurs bilaterally between dealers and their customers; such trading is costly, which leads to a wider spread and decreased market liquidity. These findings are consistent with Paiardini (2015), Harris et al (2015) and Gunduz et al (2018). Moreover, lack of transparency in the corporate bond market leads to considerable transaction costs (Goldstein et al, 2007;Bessembinder and Maxwell, 2008).…”

Taxes and social instability: How large corporations and wealthy taxpayers hide taxable money?

“…The shadow banking system has grown in recent years to become an important pillar of the money laundering and tax evasion in many developed countries (O tsch and Schmidt, 2016;Zagaris, 2007). This system includes all institutions offering credit and other financial intermediation services outside the scope of banking regulation (Paiardini, 2015;D' Arista and Schlesinger, 1993). These institutions therefore perform bank-like activities without being subject to banking regulations, in particular the sharing of information with tax authorities where legal provisions allow.…”

Spread determinants in corporate bond pricing: The effect of market and liquidity risks

“…In another study by Jiang and Lo (2014), they found that bond price changes associated with high intensity of private information flow display persistence over time. Paiardini (2015) investigated the market microstructure in Italian government bond market, which is the largest market in Eurozone, and showed a lower probability of informed trading in dealer-to-customer market compared to the inter-dealer market.…”