Although the bank recognized that it could be a source flow, senior management were wary of the reputational risk that facilitating access to the vast FX market carried. Now, though, the launch of FX on Barx by sister company Barclays Stockbrokers suggests that the bank has made a U-turn.
It is hard to ascertain just how big retail FX now is. According to US regulator, the National Futures Association, there are 25 registered forex dealer members in its jurisdiction, and there are probably as many again in each of the UK, Japan and Switzerland. Saxo, one of the leading players in retail FX, has more than 100 white-label partnerships. So data from the 2008 Euromoney FX poll suggesting that there are about 150 platforms globally and that they pass on $20 trillion of flow a year (about $80 billion a day) to their liquidity providers, FX trading banks, looks a conservative estimate. With many of the retail aggregators internalizing their flow and looking to capture at least part of the bid-offer spread in much the same way as banks, the amount of business transacted is likely to be in excess of $100 billion a day.