In this report, we continue our assessment of Treasury’s sweeping report on U.S. capital-market reform, focusing on recommendations for Treasury-market changes. This is of course among the most important issues confronting the U.S. Treasury given the critical importance to taxpayers of a liquid, efficient market for USG obligations. In its work on the Treasury Market (see Client Report USG), the Obama Administration was also keenly conscious of this and it is thus not surprising that the Trump Treasury report echoes many Obama-era recommendations. Both reports emphasize the need to continue to study the changing nature of the market, especially with regard to the growing number of principal trading firms (PTFs) using new methodologies that could lead to flash events.
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