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Lower Liquidity Could Be a Boon for Active Bond Managers

BlackRock's Rick Rieder says active management of fixed income may not be a zero-sum game because there are so many different securities and areas to investigate.

Eric Jacobson: Let me switch gears. You mentioned the crisis a little bit. One of the things that we've seen over many years with Dodd-Frank and all the financial regulation issues, we talk about a lot in fixed income, is the dearth of liquidity or the sapping of liquidity as the banks have stopped supporting trading and so forth.

Big debate among people on how important it is or isn't because of all the holdings on the buy side and so forth. People have referred to the amount of volume as some sort of proof statement that everything is OK. But I've heard other managers express extreme worry about this, saying that there have been a couple of periods, mid-2013, another one mentioned January 2016, where things just stopped in their words. What is your thinking on the entire situation?