Inter-dealer brokers (IDB) are specialist financial intermediaries that facilitate transactions between which parties?

Inter-dealer brokers (IDB) are specialist financial intermediaries that facilitate transactions between which parties?

• A. Retail brokers and investors
• B. Broker-dealers, dealer banks and other financial institutions
• C. Central banks and governments
• D. Corporate treasuries

Answer: (B)

Inter-dealer brokers operate in the wholesale, over-the-counter market, serving institutional traders by bringing together buyers and sellers. They facilitate trades between broker-dealers, dealer banks (banks that act as market makers) and other financial institutions, providing price discovery, anonymity, and efficiency for large, negotiated transactions. They’re not typically the channel for retail investors, and while central banks, governments, or corporate treasuries may engage in markets, IDBs focus on institutional counterparties—the entities that regularly trade large blocks of securities.

Inter-dealer brokers operate in the wholesale, over-the-counter market, serving institutional traders by bringing together buyers and sellers. They facilitate trades between broker-dealers, dealer banks (banks that act as market makers) and other financial institutions, providing price discovery, anonymity, and efficiency for large, negotiated transactions. They’re not typically the channel for retail investors, and while central banks, governments, or corporate treasuries may engage in markets, IDBs focus on institutional counterparties—the entities that regularly trade large blocks of securities.