The focus on credit, as well as a degree of regulatory uncertainty, appears to have led to an increase in the importance of sales to financial institutions, according to sources at major FX houses. The reasoning is that banks are happy to assume counterparty risk with other banks and FIs, particularly in emerging markets, but less willing to trade directly with buy-side counterparties. Another issue is the uncertainty surrounding the legitimacy of some derivative products – whether or not they have been missold has led banks to effectively seek to have credit disintermediated.
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