BNY and State Street see FX decline in Q4 2011

Two of the worlds leading custodian banks have seen a difficult end to 2011 as results show declines in profit and FX revenue. Surprisingly both banks have been under the regulators radar.

BNY Mellon announced a significant reduction in profit, the group made $505 million; down by 26%.

Their FX division saw an 11% reduction in revenue compared to 2010.

On the other hand, State Street saw revenue on an operating basis ending flat however the $2.29 billion measured below Wall Street analysts who estimated $2.4 billion.

Their FX revenues were down by 12%.

BNY Mellon has been facing a civil suit against them on the back of one if its pension finds claiming they were overcharged for dealings in Foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term. State Street saw the SEC investigate the pricing they gave to their custodial clients.

2011 was a strong year for ECN's as Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term helped trade volumes, however BNY and State Streets decline in trade volumes shows how important reputation is in this fast paced industry.