The current concern about liquidity in corporates is simple. Dealers have been holding less in inventory, yet there has been a significant increase in the amount of bonds being issued. There has not been a significant amount of global deleveraging so the debt outstanding is still high. Most expectations would say that the cost of immediacy when there is less dealer inventory should be impaired. If that is not the case, the cost of search for finding liquidity has to have gone down or dealers have gotten much better at their jobs.
The strutural change in corporate bond trading is very simple - dealers are falling out, matching engines and requests for quotes are in. Although dealer inventories have fallen relative to the debt outstanding and the amount of trading, alarm bells have not occurred because there have been changes in the way business is done. There are a growing number of platforms and matching engines in corporate bonds. Some have failed. Others have not reached critical mass. There is no single "exchange" or dominant player, but electronic matching, request for quote type systems, have moved from single digit to almost one third of the trading. Dealers are not adverse to this if they can facilitate trading and use less capital. The electronic trading of equities, futures, currencies and cash Treasuries is coming to corporate bonds and this may be a savior to the market.