Banks Face Swissie Music – Citi Lost $150 Mln – Bloomberg
Leading banks have been victims of the recent currency markets crisis according to Bloomberg. Reports suggest that Citi suffered a
Adil Siddiqui
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Technology
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Institutional FX )
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2015-01-16T21:52:01+00:00
2015-01-16T21:52:01+00:00
One of the world’s largest forex dealers, Citigroup, is believed to have suffered significant losses on the back of the Swiss central banks move to tamper with its affairs. Bloomberg reported that Citi lost over $150 million. The US-based bank was accompanied by Deutsche (DB) and Barclays, people familiar with the matter said. The Swissie dilemma has had detrimental effects on the derivatives broking sector with London firm, Alpari UK calling it quits.
Banks have kept below the radar when discussing their CHF exposure. The said bank’s losses are believed to be correlated to losses reported by retail aggregators who use banks for liquidity and prime brokerage services. Listed forex broker, FXCM, reported losses of $225 million but has since reported a bail-out package.
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Both Barclays and DB are believed to have lost considerable amounts but less than $100 million and $150 million reported respectively.
Swiss banks are yet to report of their exposure to the market, however discussions with senior traders reveal that market makers on the CHF came out strong, with the majority of traders holding long positions.
Institutional traders and buyside members have seen an influx in banks using last look practises to overpower their clients. One trader who commented on the basis of anonymity said to Forex Magnates: “Quite simply Banks are having the biggest last look ever, typical of the market today, they enter a risk market and when it goes against them they fail to honour the trades.”
Last look is typically 200-500ms. Most traders would hardly notice
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but the anonymous observer is suggesting that banks can simply cancel their contract after the fact? as in request a do-over?
The Barclays fx desk should be shut down. They were streaming a price of 6 cents at one stage during the volatility. Its banks like this that cause the huge price swings and destroy brokers and their clients. They are seriously incomptent and deserve to loose. Whats more they clearly have no price filters in place to stop them from streaming junk prices.
Get with the program Barclays you are a discrace to the forex industry which you do not deserve to operate in. I hope senior management at Barclays shut down your desk.
Interesting Austin, I notice that IC Markets had a spike down to 6 cents on the USD/CHF I wonder if this erroneous tick (which they are reversing) was from Barclays through their backup Currenex feed that was activated when their Integral feed went down.
Matt,
Can you make contact at mtracex@yahho.co.uk on this matter?
Thanks in advance.
Its always the banks that cause the issues. Regulators should step in an impose laws that allow them to only x% from the last price. They operate like cowboys, throwing rubbish pricing into the market causing unwanted volatility.
They need to be stopped fast, the FCA should investigate Barclays actions and fine them or impose some king of restraints.
“Quite simply Banks are having the biggest last look ever, typical of the market today, they enter a risk market and when it goes against them they fail to honour the trades.”
I assume banks are regulated and they can’t brake rules. So they’ll have to pay what they owe to brokers.
If *no” then banks are allways are in win-win situation.
Correct me if i’m wrong.
The banks are a the worst when it comes to honouring trades its disgusting. Whats more sumbags like Barclays mentioned by others are those responsible for all the volatility. Its disgusting.