November 2014
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Market-makers serve a crucial role in financial markets by providing liquidity to facilitate market efficiency and functioning. Changes in the behaviour of marketmakers as well as other liquidity providers and their impact on liquidity in fixed income markets are of particular interest to policymakers, given the relevance of these markets to monetary policy and financial stability. This report studies current trends and drivers that determine these behaviours before going on to assess their implications for market functioning and robustness.