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Steep drop in institutional Forex volume is reported

by Michael Greenberg
    Steep drop in institutional Forex volume is reported
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    The Foreign Exchange Committee today released the results of its tenth Survey of North American Foreign Exchange Volume.

    The announcement to this survey can be found on the Foreign Exchange Committee's website at https://newyorkfed.org/fxc/.

    Results of this survey, together with the list of reporting dealers and explanatory notes, are available online at www.newyorkfed.org/fxc/volumesurvey.

    The Foreign Exchange Committee today released the results of its tenth Survey of North American Foreign Exchange Volume.

    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:

    ABN AMRO

    Bank of America

    Bank of Montreal

    The Bank of New York

    Bank of Tokyo-Mitsubishi

    Barclays Capital

    BNP Paribas

    Citigroup

    Canadian Imperial Bank of Commerce

    Calyon

    CSFB

    Deutsche Bank AG

    Dresdner Bank AG

    Goldman Sachs & Co.

    HSBC Bank USA

    JP Morgan Chase Bank

    Merrill Lynch

    Mizuho Corporate Bank

    Morgan Stanley

    Royal Bank of Canada

    Royal Bank of Scotland

    Skandinaviska Enskilda Bank

    Société Générale

    Standard Chartered

    State Street Corporation

    Sumitomo Mitsui Banking Corporation

    UBS Bank

    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.

    The Foreign Exchange Committee released the results of its tenth Survey of North American Foreign Exchange Volume -

    The Foreign Exchange Committee today released the results of its tenth Survey of North American Foreign Exchange Volume.

    The announcement to this survey can be found on the Foreign Exchange Committee's website at https://newyorkfed.org/fxc/.

    Results of this survey, together with the list of reporting dealers and explanatory notes, are available online at www.newyorkfed.org/fxc/volumesurvey.

    The Foreign Exchange Committee today released the results of its tenth Survey of North American Foreign Exchange Volume.

    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:

    ABN AMRO

    Bank of America

    Bank of Montreal

    The Bank of New York

    Bank of Tokyo-Mitsubishi

    Barclays Capital

    BNP Paribas

    Citigroup

    Canadian Imperial Bank of Commerce

    Calyon

    CSFB

    Deutsche Bank AG

    Dresdner Bank AG

    Goldman Sachs & Co.

    HSBC Bank USA

    JP Morgan Chase Bank

    Merrill Lynch

    Mizuho Corporate Bank

    Morgan Stanley

    Royal Bank of Canada

    Royal Bank of Scotland

    Skandinaviska Enskilda Bank

    Société Générale

    Standard Chartered

    State Street Corporation

    Sumitomo Mitsui Banking Corporation

    UBS Bank

    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.

    The Foreign Exchange Committee released the results of its tenth Survey of North American Foreign Exchange Volume -

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