As of June 2012 there was $8.5 trillion of US corporate debt outstanding. But, relative to equity markets, the microstructure of the US corporate bond market has been under-researched. Dealers in the bond market have reduced their inventories substantially since October 2007. This coincided with the start of large write-downs on the balance sheets of several banks (Citi, Merrill Lynch, UBS), whose dealer businesses had substantial share in liquidity provision for the trading of US corporate bonds…

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