Roger Aitken
Roger Aitken

FX Liquidity Management: Should you be taking a more pro-active approach?

The topic of Liquidity Management across the capital markets and in the FX space in particular has received a growing level of attention over recent years as innovation has allowed technology to meet the complex Liquidity requirements of banks and financial institutions, thus helping to deliver efficiencies and mitigate risk. Roger Aitken talks to some leading technology vendors to find out more about the latest developments within this space.

First Published: e-Forex Magazine 40 / Features / July, 2010

Definitions The definition and applications relating to Liquidity Management have prompted  a considerable amount of debate. Various market participants have used it as a catchall term, with the meaning interpreted slightly differently depending on who one canvasses. However, whichever way you choose to define it, having a sound FX Liquidity Management structure in place helps to ensure that trading opportunities can be more effectively grasped and risks more efficiently managed. It also makes even more sense in terms of institutions when they are operating globally and managing FX rates and Liquidity internally and for their external clients. With regard to key applications including Liquidity Aggregation, CEP and Smart Order Routing, one definition of Liquidity Management might be to regard it as the “science of automatically managing market and resting order flow with minimum human intervention”, according to Yaacov Heidingsfeld, CEO and co-founder of TraderTools Inc., a New...continued

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