Primary Dealers in Government Securities

Primary Dealers in Government Securities

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In many countries, authorities have designated a group of financial firms as the principal intermediaries in the government securities market-referred to as qprimary dealersq or a qprimary dealer system.q This paper discusses policy issues related to the establishment of a primary dealer system for countries that may be considering taking this step. In this regard, a key issue is whether a primary dealer system fits into the overall strategy for financial market development in the country. Under a primary dealer system, the debt manager and the group of primary dealers pursue a common strategy in support of the effective functioning and development of primary and secondary markets for government securities. This paper presents results of a survey of country practices conducted in early 2001. Among the countries surveyed, there was broad agreement among authorities that a primary dealer system is to be highly recommended.Policy Issues and Selected Countries Experience Mr. George Iden, Mr. Marco Arnone ... of a market or a group providing additional liquidity and transparency to the market for the purpose of better price discovery and resource allocation.

Title:Primary Dealers in Government Securities
Author:Mr. George Iden, Mr. Marco Arnone
Publisher:International Monetary Fund - 2003-03-01


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