The Bank of International Settlements (BIS), has just released a in-depth analysis of the recently released 2013 Triennial FX Survey, looking at the changing structure of the FX market, and drawing some conclusions.
Some of this was covered in our recent coverage of the 2013 Triennial FX Survey, some of the key points of which are shown here, but worth reading the report in full.
- Non-dealer financial institutions were the major drivers of FX turnover (much through the use of prime brokers)
- The reporting dealer market, by contrast, has grown more slowly (partly due to internalisation of flow by top tier banks), and
- Trading volume of non-financials (mostly corporates) has actually contracted
- In today’s market structure, electronic trading dominates. It is the preferred trading channel, with a share above 50% for all customer segments.
- Non-financial institutions mostly prefer direct contact with their relationship bank, either via the phone or via a single-bank platform.
- Financial customers are less loyal to their dealer often trade either directly with dealers electronically direct electronic price streams), or indirectly via multi-bank platforms and electronic brokerage systems that were previously the exclusive venues of inter-dealer trading
- Retail accounts for some 3.5-3.8% of daily FX volumes
The climb in FX turnover between 2010 and 2013 appears to have been mostly Continue reading
Filed under: BIS, FX, Paul Blank, Single-Dealer Platforms, Survey Results, Web trading technology | 3 Comments »
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