The purpose of the contract is to gather new information on the drivers of market liquidity in European corporate bond markets. The contractor must provide new qualitative and quantitative empirical analysis on the significance of certain characteristics (e.g. the extent of electronic trading and standardisation, relative importance of pre-trade transparency obligations, investor types) as drivers of market liquidity in EU corporate bond markets.

The following tasks will be carried out:

— literature review,

— data collection,

— creation of sample sets,

— empirical analysis on the drivers of market liquidity in EU corporate bonds markets,

— empirical analysis to identify the different levels of market liquidity between corporate bonds which are traded electronically and those only traded over the counter,

— sensitivity analysis of the credit spreads of EU corporate bonds to changes in dealer inventories.

The overall analysis should cover all 28 Member States. Where resource or data constraints require it, deeper analysis can be restricted to specific market segments, or Member States, if it is not possible to conduct analysis for all 28 Member States in every case. The analysis could also look at countries outside the EU if they provide useful case studies.