Bonds are traded in over-the-counter markets, where opacity and fragmentation imply large transaction costs for retail investors. Is there something special about bonds, in contrast to stocks, precluding transparent limit-order markets? Historical experience suggests this is not the case. Before WWII, there was an active market in corporate and municipal bonds on the NYSE. Activity dropped dram...

There has recently been a surge of research efforts aimed at very early detection of disease outbreaks. An important strategy for improving the timeliness of outbreak detection is to identify signals that occur early in the epidemic process. We have developed a novel algorithm to identify aggregates of "similar" over-the-counter products that have strong association with a given disease. This p...

This article offers a dynamic model of opaque over-the-counter markets. A seller searches for an attractive price by visiting multiple buyers, one at a time. The buyers do not observe contacts, quotes, or trades elsewhere in the market. A repeat contact with a buyer reveals the seller’s reduced outside options and worsens the price offered by the revisited buyer. When the asset value is uncerta...

1. First, a number of financial markets—often called over-the-counter or “OTC” markets—are actually best described by a typical search and bargaining model; in these markets, investors have to locate a counterparty themselves, and once they find a suitable trading partner the two are free to trade at any mutually agreeable price. Hence, these models represent the most natural framework to study...

In order to clear a new product or market, the key factor a CCP must consider is its ability to manage the risks the product or market presents including the risk of default. This would normally require: the CCP has access to accurate pricing and valuation data; a degree of contract standardisation; and sufficiently deep liquidity in the market (or in sufficiently close hedges) to facilitate de...