One trade a day is not a liquid market, Isda argues
Debate over Mifid II definition of liquidity starts, with Isda arguing in favour of approaches that would catch less than half of interest rate swap trades
The first shots were fired yesterday in what promises to be a tense battle over the definition of liquidity in Europe's over-the-counter derivatives market. Only swaps that trade multiple times a day should be considered liquid, according to the International Swaps and Derivatives Association – regulators have implied even instruments that trade only once every other day might count.
The debate is important because liquidity plays a crucial role in the Markets in Financial Instruments Directive
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