The convention in calculating trading costs in corporate bond markets is to assume that dealers provide liquidity to … provide liquidity in corporate bond markets, and thus, average bid-ask spreads underestimate trading costs that customers … results indicate that liquidity decreased in corporate bond markets and can help explain why despite the decrease in dealers …

investment commonalities subject investors to fire-sale risk when regulatory restrictions prompt widespread divestment of a bond … following a rating downgrade. Reflective of fire-sale risk, clustering of insurance companies in a bond has significant … explanatory power for yield spreads, controlling for liquidity, credit risk and other factors. The effect of fire-sale risk on …