Those who work in it don’t need to be told that FX is an asset or that it’s a proper market. It simply is much cleaner and not so easily rigged as most others, such as equities.
It seems incredible that it was only a few years ago that company after company used to routinely report a fall in revenues because they had mismanaged their FX exposure. Put another way, they neglected to look after their assets properly. Those days would appear to be a thing of the past, and as one industry big cheese pointed out to me this week, this is one thing for which the banking industry deserves a pat on the back. It has educated its client base extremely well and also delivered the products that have made their lives much easier.
But there remains a real sense of nervousness in FX. The swaps market has obviously been severely impacted with the pressures in depos – it seems the days when anyone could broke depos as every quote was always a close variation on five eighths half, might come at 9 from what I remember – have passed. As I wrote a while back, we now have a new funding paradigm.