The following dealers participated and reported a decline of over 25% in traded volumes across all instruments as well as strong signs of consolidation in that sector:
Bank of America
Bank of Montreal
The Bank of New York
Bank of Tokyo-Mitsubishi
Canadian Imperial Bank of Commerce
Deutsche Bank AG
Dresdner Bank AG
Goldman Sachs & Co.
HSBC Bank USA
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JP Morgan Chase Bank
Mizuho Corporate Bank
Royal Bank of Canada
Royal Bank of Scotland
Skandinaviska Enskilda Bank
State Street Corporation
Sumitomo Mitsui Banking Corporation
Wells Fargo Bank N.A.
Key findings include:
- Average daily volume in total over-the-counter foreign exchange instruments (including spot transactions, outright forwards, foreign exchange swaps, and options) totaled $527 billion, a decrease of 26.3 percent compared with the April 2008 reporting period and the lowest level since October 2005;
- Declines in average daily volume were broad based and were reported across all currency pairs, instrument types, counterparty types, and execution methods;
- Spot market transactions conducted by the top quintile of dealers based upon market share remained elevated following the rise seen in the October 2008 survey results, continuing to suggest increased market concentration over the past year.
I doubt we’ll see any similar decline in retail forex in the near future but this may be a likely scenario in the long term. Institutional forex trading reached its maturity long time ago so this decline amid the financial crisis is not a big surprise.
Summary of the survey is embedded below for your convenience.