Faculty Publications

Document Type


Publication Date



The market for U.S. Treasury securities is critical to our monetary policy and government funding. It also serves as a benchmark for pricing other investments and has provided a haven for investors seeking safety and stability. However, concern has recently arisen that “primary dealers” in that market might have manipulated prices. In addition, an unusual market volatility event that occurred in October 2014, and the growth of high-frequency trading have raised further questions over the adequacy of regulation in that market. This article addresses those concerns. It first describes the U.S. Treasury market and identifies efforts by traders over the years to manipulate prices. It will describe the existing regulatory structure, which allocates jurisdiction to multiple regulators that have overlapping missions. The article then advocates the creation of a more streamlined and efficient regulatory system that would be administered by a single business conduct regulator tasked with monitoring and policing abuses in this critical market.