Deutsche Bank retained its position as the world’s leading foreign exchange house, according to Euromoney’s benchmark survey of the global FX industry. Deutsche Bank’s overall market share was 15.18%, rising from 14.56% last year. That increase in overall market share was just enough to hold off the challenge of second-placed Citi, which increased its market share to 14.90%, up from 12.29% last year. Deutsche and Citi have become the clear top-two players in the global FX market. Their combined market share was just over 30% of all FX trading, up from 26.85% last year. The battle for third place was equally closely contested, with Barclays edging out UBS by 10.24% to 10.11%.
The top four banks now account for just over 50% of the entire global FX market, up from 48.3% last year.
The Euromoney FX survey once again captured more FX market activity than ever before. Total valid responses numbered 16,298 (up from 15,423 last year) and represented $225 trillion of volume, compared with $208 trillion in 2012.
The Euromoney FX survey is the most comprehensive quantitative and qualitative annual study available on the FX markets.
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For all the fragmentation in the FX market, the top four banks further consolidated their dominance of customer business, according to the 2013 Euromoney foreign exchange survey. As volumes rise again in FX, volatility returns and banks’ earnings from it recover, margins are still compressing. Customers are focused on cutting transaction costs. Banks face big demands on scarce IT resources.
Fragmentation and phantom liquidity bedevil the foreign exchange market with its proliferation of trading venues. Investors and corporates want to see the true depth of the market and what amounts they can really trade at the enticing prices being flashed at them. In a low-return world, these end-users are getting rigorous on trading cost analysis. Banks are developing new technology to respond.
34 years of the FX survey: the key market share trends