FX survey 2015: Rebuilding foreign exchange

The $5.6 billion of fines handed out to six leading foreign exchange banks will not be the end of the crisis afflicting FX, but it might be the beginning of the end. The people at the top of the industry are starting to think more deeply about what will drive success in the FX markets of the future. How can foreign exchange rebuild its zest, and its reputation?





Reeling from the long-running benchmark manipulation scandal and resulting fines, and an extended period of low volatility followed by the ructions caused by the Swiss National Bank (SNB) in January, most FX business heads struggle to recall a more challenging period.

"I’ve worked in FX for 25 years and experienced many cyclical ups and downs, but these were all unprecedented shocks to the industry concentrated in a short period of time – from the original allegations of collusion in 2013 to a massive uncorrelated drop in volatility and then the chaos unleashed by the SNB," says one industry veteran.

This unique string of challenges has transformed an industry in which banks had always competed fiercely for market share, but were also known to be chatty and collegiate, sharing information where necessary and working together to address common areas of concern.

With the revelation that information sharing had morphed...