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“We’re still really just scratching at the surface of this market’s potential”
Lars Seier Christensen, Saxo Bank |
According to the most recent Bank for International Settlements (BIS) triennial central bank survey covering activity in foreign exchange in April 2004, trading has consolidated into the hands of fewer players. BIS noted that in the US, just 11 banks accounted for 75% of FX turnover in 2004 compared with 20 in 1998. It seems the big are getting bigger, leaving the smaller players to scrabble around for the crumbs from a rich man’s table.
However, in one of those contradictions that characterize the FX market, it is also clear, as Euromoney has frequently pointed out, that this consolidating market has fragmented. Nobody knows how many trading platforms exist; and most of these platforms are relative newcomers.
Technological advantage
Clearly, these platforms operate with varying degrees of success. But the fact that they emerged at all in such a competitive landscape is astonishing. Many of the new players have realized that they often possess – by luck or design – a massive technological advantage over their far bigger competitors. Now, with talk that some bigger players are struggling with the amount of tickets they are having to process, many of these smaller players are beginning to look as if they, not the old incumbents, provide the model for the FX market’s future.
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