Paul Fisher Bank of England and Chair,Foreign Exchange Joint Standing Committee
Paul Fisher Bank of England and Chair,Foreign Exchange Joint Standing Committee

e-Trading – Addressing the new Risk environment

Paul Fisher and Alexander Flatner examine some of the risks related to the development of new e-commerce services such as White Labelling and Prime Brokerage.

First Published: e-Forex Magazine 14 / Leader / April, 2004

Alexander FlatnerBank of England/The Norges Bank.In the past fifteen years or so, the accelerating pace of technological change has been facilitating increasingly rapid advances in the foreign exchange market. The first of the electronic inter-bank matching systems from Reuters was introduced in 1989 and its rival EBS four years later. These two systems have become impressive liquidity ‘pools’ and the number of transactions has been steadily rising in the past two years, reflecting the renewed interest in trading foreign exchange as an asset class.Internet trading systems are a more recent development, spanning the last ten years or so and rapidly growing volumes are reported on both single and multi-bank portals. The liquidity and near inter-bank prices available in these e-commerce systems appear to be opening up the market to end-users and increasing their efficiency: for example by making straight through processing easier to achieve. And, although there is quite a long way to go yet before...continued

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