The chairman of Europe’s securities watchdog has admitted that it will not be able to create a perfect system to balance transparency and liquidity in bond markets, despite having gone “back to the drawing board” to re-assess the different approaches.

Market participants and policymakers are concerned that requirements in the review of the Markets in Financial Instruments Directive to publish trade information for non-equity transactions, such as trades in bonds and derivatives, may harm liquidity. In particular, they are concerned that thresholds for defining when a bond is subject to transparency requirements are too loose.