primary dealer system

A primary dealer system refers to a network of financial institutions authorized to buy government securities directly from the government. These dealers play a crucial role in the bond market by facilitating the buying and selling of government debt, which helps the government raise funds for various expenditures. They also help maintain liquidity in the market by trading these securities with other investors. Additionally, primary dealers have obligations to participate in government debt auctions and provide market information, contributing to a stable and efficient financial system.