‘Liquidity is still credit’: FX pros debate how to lend better
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Foreign Exchange

‘Liquidity is still credit’: FX pros debate how to lend better

Market participants have welcomed recent moves to enhance FX liquidity by increasing the efficiency of credit payments for trades.

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Illustration: iStock

Earlier this year, credit optimization specialist CobaltFX announced that BNP Paribas and NatWest had started using its technology to manage credit exposures for FX trades on interbank trading venues.

According to a report produced by the Global Financial Markets Association’s global foreign exchange division in June, broader adoption of dynamic credit solutions would enhance the FX market structure for the benefit of all institutional market participants by facilitating increased trading opportunities and meeting client demand when and where it is needed most.

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Joe Nash, BNP Paribas

By simplifying and streamlining the allocation of credit for FX transactions between banks, CobaltFX believes it can improve access to liquidity and capitalize on a trend of financial institutions optimizing the disbursement of credit for FX trades to improve market access and control.

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