Benchmark Status in Fixed-Income Asset Markets

What is a benchmark bond? We provide a formal theoretical treatment of this concept that relates endogenously determined benchmark status to the location of price discovery and we derive its implications. We describe a rich but little used econometric technique for identifying the benchmark that is congruent with our theoretical framework. We apply this in the context of the US corporate bond market and to the natural experiment that occurred when benchmark status was contested in the European sovereign bond markets after the introduction of the Euro. We show that France provides the benchmark at most maturities in the Euro-denominated sovereign bond market and that IBM provides the benchmark in the 10 year maturity in the US corporate bond market.

Transparency Proposals for European Sovereign Bond Markets

The debate over the possible extension of transparency regulation in Europe to include sovereign bonds has opened up a number of other issues in need of serious consideration. One such issue is the appropriateness of the entire infrastructure supporting the trading of European sovereign bonds. In recent years sovereign issuers have supported the development of an electronic inter-dealer market but have remained unconcerned with the opacity of dealer-to-customer trading. The degree of segmentation in this market is high relative to what exists in nearly all other financial markets. This paper explores why European sovereign bond markets have developed in such a segmented way and considers how this structure could be altered to improve transparency without adversely affecting liquidity, efficiency or the benefits enjoyed by primary dealers and issuers. It is suggested that the structure of the market could be improved greatly if the largest and most active investors were permitted access to the inter-dealer electronic trading platforms. This would solve a number of market imperfections and increase the proportion of market activity that is conducted in a transparent way. The paper argues that sovereign issuers in Europe have the means to provide incentives that would influence dealers to support reduced segmentation. Some practical examples of how this could be achieved are provided and the potential benefits are outlined.

Fiddling for Outcomes: Traditional Music, Social Capital, and Arts Policy in Northern Ireland

Arts development policies increasingly tie funding to the potential of arts organisations to effectively deliver an array of extra-artistic social outcomes. This paper reports on the difficulties of this work in Northern Ireland, where the arts sector, and in particular the so-called 'traditional arts', have been drawn into a politically ambiguous discourse centered on the concepts of 'mutual understanding' and, more recently, 'social capital.' The paper traces the recent history of these policies and the difficulties in evaluating the social outcomes of arts programs. The use of the term 'social capital' in the work of Putnam and Bourdieu is considered. The paper argues, through a rereading of Bourdieu's articulation of the 'forms' of capital and Eagleton's 'ideology of the aesthetic,' the concept of social capital can be released from its current neoliberal trappings by imagining a reconnection of the concepts of 'capital' and 'the aesthetic.'