Bank chiefs say thank FX
More than one senior sell-side figure has suggested I write about how much the banks should be thanking their FX businesses.
After all, it seems that most FX sell-side participants had a stellar year in 2008.
Yet profits from FX have been miniscule when compared with the losses racked up elsewhere. I would love to be able to put a precise figure on how much the Euromoney top 10, for example, made last year. That is impossible, but there is no doubt that those working in FX feel aggrieved, and they have every right to do so. As one big cheese says, people in FX did not benefit from the boom years like those working in credit, and, through no fault of their own, are now being punished almost as badly, at least in terms of remuneration.
With the market capitalisations of banks so low, it makes me wonder how conceivable it would be to lift an FX operation out of one of the Euromoney top 10. Setting up a solid global operation is not just about getting the right people – they are not as important as they once were – but about getting the right systems and most importantly, sufficient credit lines to service clients as a bank, not as a broker.
Interestingly, many of the alternative providers, such as Saxo Bank, FXCM and Oanda, are close to being in this position.