Caught without a net? Why the big banks now need a netting solution for FX

Increasing FX volumes are putting the strain on many back offices, so is the time now right for netting solution for global spot FX? Richard Brass investigates.

First Published: e-Forex Magazine 26 / Case Study / January, 2007

Whisper it quietly; the ever increasing trading volumes in spot FX are putting pressure on the back offices of many banks, but you’ll never hear them admit it in public. Research from TowerGroup predicts that by 2007, global FX daily average volumes will exceed US$3 trillion, with more than 44% of this volume executed electronically. This represents a significant increase from US$1.77 trillion in 2004. While electronic FX trading is still dominated by the large dealing banks, the market has also absorbed hundreds of new participants from both emerging and developed markets and non-banks all seeing great opportunity in FX. This is, broadly speaking, excellent news for liquidity, as the more volume and diversity of participants, the more trading opportunities for all as organisations can get the price in the currency pair at the time they need. But it also creates issues.Ticket processing issuesMany back offices are finding it hard to maintain the increasing volume of tickets which need processing. ...continued

Exclusive Content

The full article is only available to current subscribers. Click here to sign in or subscribe by clicking here