Foreign exchange debate: The future’s bright despite the tough fines

Part one: Foreign exchange debate - Investing in FX: learning history lessonsDelegate biographies: Learn more about the panelists DB, HSBC Are you optimistic for the FX business? CKG, Société Générale Absolutely – for a number of reasons. First, while global GDP will slow, corporates will still need to carry out commercial transactions. Second, financial institutions will still need to chase alpha. Third, volatility has picked up, meaning the first two points become more relevant. Fourth, bid-offer spreads have widened, meaning the competitive fall-on-your-sword attitude to capture market share will abate. But finally, for banks that have pressure on balance sheet and capital usage, foreign exchange offers the highest revenue per unit of balance sheet used, and it is scaleable. The capital challenges that face many banks and the greater sensitivity for end users to counterparty credit risks mean that the door is open for tier 2 banks to make substantial gains in...