Caroline Henshaw
Caroline Henshaw

A powerful mix: regional FX providers combine high-tech trading with local currency expertise

Regional eFX providers are making a comeback in currency markets long dominated by the majors, as the myriad new, sophisticated technology solutions available has made them more competitive at a time when clients are increasingly seeking local expertise and dedicated service.

For years a handful of global banks have run the lion’s share of the world’s currency markets, between them managing more than half of all global flows worth more than $5 trillion a day, as the rise of proprietary risk-taking and electronic trading have seen them take ground from smaller local banks. But the upheaval of the global financial crisis has been prompting a sea-change in the makeup of global FX trading as clients have turned to regional banks for their in-depth insights and broad local networks in the face of uncertain and volatile trading conditions. Heightened regulation since the global financial crisis and subdued market conditions have seen investment banking revenues decline and trading costs rise. At the same time, the new rules have made it often simpler for participants to deal with counterparties at a national rather than an international level, leaving regional banks well-positioned. Figures from the Bank of International Settlements showed smaller banks were among one of...continued

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