Manfred Wiebogen President ACI The Financial Markets Association
Manfred Wiebogen President ACI The Financial Markets Association

FX – holding up in the global liquidity crisis

The global financial system has been in a crisis for almost 18 months now. The EUROFI, the European think tank (advising the ECOFIN Council) dedicated to accelerating the integration and efficiency of financial services in Europe recently identified some key causes behind the crisis: long period of excess liquidity, low interest rates for too long, excessive appetite for poorly measured risks, misuse of securitization.

Untouched by this global liquidity crisis Foreign Exchange business is doing pretty well – spreads widened and volumes are still moving up. Foreign Exchange has seen an outstanding annual increase of 18% over the past 6 years. The figures are known, and we can assume the daily traded FX volume has already exceeded some US$ 3,500 billion a day by the 4th quarter 2008. Driving forces in the markets ACI recently went into discussion with representatives from the industry on the Foreign Exchange  phenomenon. It was no surprise the strong increase in this area has been facilitated by electronic trading platforms, algorithmic trading as well as a strong growth from the investment community.At the beginning of the millennium e-trading platforms were still relatively new and concentrated on building their customer base. In the years that have followed e-trading has become one of the most common ways to trade FX, allowing organisations to access increased efficiencies for sell-side organisations, as...continued

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