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EC calls for experts to improve corporate bond liquidity

The European Commission has announced plans to set up an expert group that will monitor and improve the market liquidity of corporate bonds. The group will provide practical market expertise and input on corporate bonds in the EU, with the aim of improving efficiency and resilience in the market, according to the Commission's statement.

Applications from those wishing to participate in the expert group will be received by the Commission until 22 July 2016. See the Commission's website for details of how to apply.

In its statement, the Commission said that corporate bonds are increasingly important for European businesses to raise finance and that the volume of European issuance has nearly tripled since 2008. It added: “Despite record primary issuance, some market participants have raised concerns about limited liquidity and market functioning in the secondary markets, which make it difficult to trade in and out of these instruments. Limited liquidity could translate into higher illiquidity premiums and higher borrowing costs.”

The creation of the expert group is part of the Commission's Capital Markets Union (CMU) plan. The aim is to better understand how corporate bond markets are evolving and how policy can help to enhance the efficiency and resilience of this market as a funding channel for companies and an investment opportunity for investors.

According to the Commission's statement, the group will consist of 15-18 highly qualified representatives, with current or prior experience in EU corporate bond markets. They will collectively cover the views of: (i) investors; (ii) issuers; (iii) market-makers/dealers/brokers; and (iv) exchanges/trading platforms.


CTMfile take: Having corporate treasurers represented in this expert group will be essential for putting across the corporate perspective and for steering policy towards making the corporate bond market an attractive funding channel for companies. 

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Financing
Financing Short-Medium Term Deficits

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