Pimco Says Let Investors Trade Treasuries With Each Other
- Calls for all-to-all-trading to improve bond-market depth
- Also urges easing of bank regulations, broadening Fed programs
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Pacific Investment Management Co. is advocating a radical solution to fix the liquidity woes plaguing the world of bonds: The entire $23.7 trillion Treasury market should move to a model where investors can transact directly with each other -- reducing their unhealthy dependence on balance-sheet-constrained banks.
Among other suggestions, a report from the nearly $2 trillion asset manager urges Janet Yellen’s Treasury Department and other regulators to help create alternative avenues that would allow traders to find buyers and sellers when the primary dealers who normally handle large orders are unable to do so.