Yaacov Heidingsfeld
Yaacov Heidingsfeld

Liquidity Management: Key issues for the FX Sell-Side

Liquidity Management, as it relates to financial services companies, is a topic that has received a growing of attention in recent months. New reports, from TABB, AITE, Financial Insights and ClientKnowledge, examine Liquidity Management solutions being considered by various institutions and document some of the early adopters in the marketplace. These reports discuss the explosive growth of interest in this area and describe an overall approach to Liquidity Management in the context of managing transaction flows and cash positions throughout the enterprise.

First Published: e-Forex Magazine 33 / FOCUS / October, 2008

In the context of Foreign Exchange (FX) trading, there has also been considerable debate on the applications and definition of Liquidity Management. Key applications include liquidity aggregation, CEP (complex event processing) and smart order routing. Therefore, the following definition of Liquidity Management, as it relates to FX trading, would be appropriate: Liquidity Management is the science of automatically managing market and resting order flow with minimum human interaction. Traditionally manual and time-consuming tasks can now be automated with centralized data repositories less that are both less expensive and less difficult to install and maintain. High-volume processing engines and bolt-on solutions reduce the need for costly replacements of legacy systems and enable an organization to implement a gradual, staged implementation to help reduce overall cost, fear and pain. Out-of-the-box solutions support Treasury in managing risk and positions, with an enterprise-wide, real-time...continued

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