Investors provide liquidity to dealers in the corporate bond market, reducing transaction costs across trades. This is especially valuable during stress periods: for instance, during the March 2020 Dash-for-Cash, transaction costs rose by 38%% in bonds where investors acting as liquidity providers for dealers exited. The composition of dealers' network of liquidity suppliers matters: Bonds relying on flexible-mandate clients, like hedge funds, are more robust to liquidity strains. Dealers sustain their liquidity networks by offering discounts to clients in these networks, even when they demand liquidity. Overall, liquidity networks acts as insurance for dealers: They are use infrequently but make them more resilient to increases in their intermediation costs.

We develop a model of the repo market with strategic interactions among dealers who compete for funding in a decentralized over-the-counter market and have access to a centrally cleared interdealer market. We show that such ``wiring'' of the repo market combined with imperfect competition in dealer funding could result in market inefficiencies and instability. The model allows us to disentangle supply and demand factors, and we use these factors to estimate supply and demand elasticities. Our estimates suggest that the instability of the market in September 2019 was driven by a large supply shock facing inelastic dealer funding demand, amplified by strategic interactions among dealers. We evaluate different interventions for market functioning and efficiency, including the Standing Repo Facility.

I argue post-financial crisis regulations create a tradeoff between immediacy and resiliency in corporate bond market liquidity. While existing studies have documented that stricter capital requirements reduced dealer inventories, leading to longer trading delays in normal times, this paper highlights the intended benefits of these regulations: enhanced market resiliency during crises. Using data from the Great Financial Crisis (2008) and the COVID-19 pandemic (2020), I show that better-capitalized dealers have more balance sheet flexibility to absorb systemic selling pressures by "leaning against the wind", stabilizing prices and accelerating recovery. High-yield bonds, which experience disproportionately larger declines in immediacy compared to investment grade bonds, exhibit the most significant improvements in resiliency, driven by dealers' increased balance sheet capacity. I develop a stylized over-the-counter (OTC) model that formalizes this tradeoff, linking lower dealer inventories in normal times to greater balance sheet capacity available during crises. By bridging the immediacy costs and resiliency benefits, I offer a balanced framework for assessing the welfare implications of post-GFC regulations on market liquidity.