Financial fragmentation has manifested itself in the form of strong divergences between sovereign yields and ensuing differences in the cost of funding across banks, depending on the country in which these banks operate.
7 The bid-ask spreads for single-name investment-grade CDS, however, are typically only 10 basis points or less, and the usual bid-ask spread for investment-grade credit indexes is just 2 basis points. The liquidity of the secondary market for loans has also improved in recent years. Trading volume totaled $ billion in 2006, up from $ billion in 2000.