The apparent decline in global bond market liquidity should be a concern for policy-makers even though it hasn’t caused any harm yet, according to a new report commissioned by a pair of financial industry lobby groups.

The Global Financial Markets Association (GFMA) and the Institute for International Finance released a new report on Wednesday that PricewaterhouseCoopers LLP (PwC) prepared on behalf of the two trade groups. The report finds that liquidity in the global bond market has dropped over the past few years, an event that it blames largely on regulation.

European corporate bond trading volumes have declined by up to 45% between 2010 and 2015, the report states. It also finds that banks’ holdings of trading assets have decreased by more than 40% between 2008 and 2015; that dealer inventories of corporate bonds in the U.S. have declined by almost 60% over the same period; and that block trades may be becoming more difficult to execute without impacting prices.

So far, this decline in liquidity has not caused measurable economic damage, the report says, amid extraordinary monetary policy measures that are reducing liquidity pressures and as the industry has adapted by trading less. However, the report warns that liquidity risks and market fragilities are likely to be revealed as monetary conditions tighten or if market stresses were to emerge, which could lead to higher volatility in financial markets.

The report suggests that a combination of factors is responsible for this drop in liquidity, including banks reducing risk in response to new regulation. In addition, the report concludes that it would be helpful to understand liquidity conditions and the link between regulation and market liquidity better so that future regulations strike the right balance between promoting stability and maintaining financial market liquidity.

“The findings from our research suggest early warning signals that regulation and other market factors are contributing to a reduction in certain aspects of secondary market liquidity that is likely to be exacerbated by the unwinding of quantitative easing or another stressed market situation,” says Nick Forrest, the report’s author and director in PwC’s economics and policy practice in the U.K., in a statement.

“Our analysis suggests it is important for policy-makers to consider the aggregate impact of current regulation and weigh the incremental financial stability benefits of new rules against the incremental costs of diminishing market liquidity to ensure regulation is not counterproductive,” he adds.

“Robust market liquidity is essential to efficient capital markets that can drive capital formation, investor opportunity and economic growth. PwC’s findings indicate the need for policy-makers to engage in further analysis of the cumulative impact of the rules implemented before moving forward with any new rules that could impede the markets from fulfilling this role,” says Kenneth Bentsen Jr., the GFMA’s CEO, in a statement.

“A tremendous amount of regulation has already been implemented over the past five years in response to the financial crisis. While the intent to improve financial stability is entirely appropriate, regulators must also consider the impact to market liquidity,” Bentsen Jr. adds.