Providing more liquid means to facilitate transactions is the primary function of financial markets. Before stock markets, the only way to participate in company ownership was to actually own a piece of the business. Before the futures market, one would have had to sell pork bellies and cotton in a physical marketplace. Markets trade instruments that are more liquid than their underlying assets.
Fixed-income exchange traded funds may be a route to much-needed bond market liquidity, just as commodity futures provided liquidity to physical markets and stocks facilitated easy transfer of corporate ownership.
Despite well-developed and liquid markets for many asset classes, bond markets remain notoriously illiquid. Capital requirements at large banks have become more stringent since the global financial crisis. Dealer balance sheets hold a fraction of the inventory of corporate bonds that they previously did.