Mariner: improve liquidity with non-bank broker dealers

Hedge funds need to step in, says CIO Williams

Basil Williams, co-chief investment officer, Mariner Investment Group

The reduction in liquidity in secondary markets is a direct outgrowth of the Dodd-Frank regulations on the banking system, which has restricted the ability of banks to run proprietary inventory positions. As a result, they are allocating less risk capital to their market-making activities.

In one sense, these regulations and the resulting decrease in liquidity have created a market that looks and behaves a lot like the market

To continue reading...