Manfred Wiebogen President, ACI
Manfred Wiebogen President, ACI

Explosion in electronic trading – challenge for the financial markets – challenge for ACI The Financial Markets Association

We live in a world of fundamental changes. Foreign currency reserves skyrocket, FX turnovers reach 3.000 bln USD per day (expressed in more detailed figures, e.g. 3 Mio transactions, each transaction worth of USD 1 Mio !), turnovers in compound structures such as certificates of the 3rd generation add enormous liquidity to the markets – business is great!

The Foreign Exchange Market is probably the world’s largest Financial Market. Open 24 hours a day and tradable 5 days a week. But it is also the largest unregulated market in the world. This calls for discipline and proper market behaviour. The fast growth of eTrading in our markets (autodealing, prime brokerage etc.) has changed our industry dramatically. Surveys show, that about 50% of the daily FX-turnover was achieved in 2006 via electronic platforms, whilst one year before the market share was between 25% - 30%. What effect has this had on the Market? Liquidity is deep, margins are razor thin, costs for transactions are low and access to the FX-market is as easy as never before. New market participants are arriving. Whilst hedge funds have become driving forces in liquidity over the last years further dynamic countries like China, India, Russia and major countries of the Near and Middle East have also emerged as extremely important players in the FX markets. Interestingly, on the other hand, the...continued

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