Marshall Bailey Managing Director, Global Head of Central Bank Relations, RBC Capital Markets
Marshall Bailey Managing Director, Global Head of Central Bank Relations, RBC Capital Markets

LEADER: FX E-commerce and the buy-side: OTC forever?

Marshall Bailey discusses how the FX market is evolving and how FX e-commerce is changing the profitability model dramatically for all.

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

Technology has always been a driving force in the evolution of the capital markets and the FX market is no exception. The participation in FX e-commerce is changing the profitability model dramatically for all, including non-e-commerce participants. However, do these changes mean a move to a more easily regulated, transparent exchange-traded model for our nearly $3,000 billion/day FX market?Today’s market, growing at a rate of round 19% a year, has also seen significant technological advances, primarily the rapid move from voice to electronic systems, a seismic shift that will also drive increases trading frequencies and volumes. And within this market, the fastest growing sector is the buy-side; today, around 44% of buy-side organisations (typically multinational corporations, asset managers, hedge funds and governments agencies) trade FX online (source: FXall, July 2006).The electronic FX marketThe electronic FX market makes up 40% of all FX trading volumes (source: Tower Group, October 2006), and...continued

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