Marketsmuse.com continues coverage of corporate bond electronic trading initiatives with outtake courtesy of coverage by Traders Magazine and column authored by Wall Street & Technology’s Ivy Schmerken. MM editor note: Since it was our chief honcho who coined the phrase “electronification of markets” 20 years ago, we’re also the first to say “If anyone has their pulse on fixed income electronic trading schemes, Ivy does.”

While new electronic venues are pushing to solve a liquidity shortage, buyside traders say the market is working fine, and they value dealer relationships.

Buyside traders say they are still finding liquidity from traditional voice dealers in the corporate bond market, though they will increase their usage of electronic venues for small trades to boost efficiency.

Despite concerns about a looming liquidity crisis and sellside balance sheets constraints, head traders speaking at an industry conference sponsored by Tabb Group said they mainly rely on voice traders to meet their liquidity needs.

Though the panel discussion was focused on the liquidity conundrum and the development of electronic bond trading networks, buyside traders said the market is working fine and they are not in a panic over a potential liquidity crisis.

“There are people confused as to where we are now and where they think we will be if we don’t see some automation or electronification of the market,” said Michael Nappi, VP Investment Grade Trader, Investment Grade FI at Eaton Vance. He said liquidity weaknesses do not affect all issues and sectors. Continue reading →