Market Facing Liquidity Test in Wake of Citi's Exit.

Broker-dealer firms are filling the gap left by Citi's exit from the municipal bond business, but the test of secondary market liquidity remains to be seen. The primary market has seen participants stepping up, but the secondary market has seen broker-dealers taking less risk since Citi's departure. The muni market is converging with other markets, emphasizing liquidity and forcing dealers to step up. Strong ties to the buyside and the ability to tell a story to investors are becoming increasingly important in a volatile market. The Securities and Exchange Commission's focus on homogenizing the markets may benefit larger issuers but leave smaller issuers out. [Extracted from the article]

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