Bank of Canada paper looks at risk in securities dealing
Complex securities dealer relationship networks can improve trading efficiency but pose contagion risk, a paper published by the Bank of Canada finds.
Using Canadian over-the-counter securities trading data, Jean-Sébastien Fontaine and Adrian Walton examine this trade-off.
They find that after new economic information is released, dealers increase their trading activity and their networks expand and become more complex
The news releases and corresponding increase in network complexity results
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