The FICC Market Standards Board has just released guidance on the proper conduct of government bond auctions, cautioning banks — and primary dealers especially — to manage their conflicts of interest carefully. That’s fine as far as it goes, but the whole point of the primary dealer system is to rig the market, with finely tuned incentives on all sides to make sure governments have access to funding whatever the weather.
Owen Sanderson,
December 03, 2019
