The senior FX trader at one of the top-15 banks in this year’s surveysmiles grimly at his phone. He has been telling how the bank recently devoted several man-years to compiling and delivering vast files of historical data on FX trades, running to billions of individual items, to one of the US regulatory agencies. It had been sniffing around the market for evidence of banks failing to provide best execution to customers. There is no single source for historical price and trade data in the over-the-counter FX market and so the regulator had approached several large banks to supply it. The banks’ pleas that the regulator was looking in the wrong place for the wrong kind of evidence in a market that had functioned well throughout the financial crisis were dismissed. The regulator wanted the data and the banks would be ill advised to cross it.
"Now, here come the excuses," he says and reads the message on his phone. After several weeks sifting the vast rows of data and with the deadline by which it had committed to provide initial findings now passed, the regulator had decided that the data it had asked for was useless.
