The primary dealership model has been put under scrutiny countless times over the years, with banks complaining of the steep costs and pressures that they are exposed to by acting as primary dealers.
Primary dealers are financial institutions that have been approved to trade bonds with a sovereign and they are often the only entities who can bid for new issuance of government bonds via auction, which they then resell to investors. In return, banks are rewarded (in most cases) with fee-paying syndications or bonds that are sold publicly in the international debt capital markets.
