Overcrowded aggregators harm everyone, DB research finds
Deutsche research finds increasing the number of liquidity providers in an aggregated environment can harm execution quality
Increasing the number of liquidity providers in an aggregated pricing environment can harm the overall quality of client execution, according to a hypothetical research paper published by Deutsche Bank. It finds that competing liquidity providers (LPs) are pushed to quote such competitive spreads that becoming the top-of-the book price becomes a disadvantage.
With the emergence of non-bank liquidity providers (NBLPs), clients who tended to have relationships only with banks have started
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