While much of the buy side bemoans the lack of fixed-income liquidity as a result of dealers’ retreat from principal trading, BlackRock’s Richard Prager offers a different perspective. Corporate bond liquidity is plentiful, in his view. The problem is that “we still have a market structure that is dependent on a principal-based system,” says the $4.3 trillion money management giant’s head of trading and liquidity strategies. “We need to modernize the market structure.” Although Prager, 54, is a strong advocate of electronic trading, that is “only part of the story.” Other elements of the solution he envisions include all-to-all platforms that would attract larger numbers of market participants; new standards and protocols to streamline issuance and trading; and behavioral and attitudinal changes among the players. “It’s all about the CUSIPs [bond issues], the behavior of the participants, the protocols. It’s the whole picture,” says Prager, who joined New York–based BlackRock in 2009 after a career on the sell side, most recently eight years with Bank of America Corp. “We need leadership from the banks, from frequent issuers and from regulators.” Noting that the Securities and Exchange Commission has acknowledged the need to address bond market structure, he adds, “We are on a journey, and it is paying off.” In its own trading efforts, to ensure it can transact regardless of market conditions, BlackRock links to more than 200 liquidity pools, Prager says. The firm is aggregating multiple pricing streams; designing systems that allow traders to view different markets at their desktops and trade with fewer clicks; and upgrading analytics, such as transaction cost analysis.