Foreign exchange debate: The future’s bright despite the tough fines
In the second part of Euromoney’s foreign exchange debate, which took place in late 2008, industry experts consider the future for the business. There is still cause for optimism, although inflation remains a big unknown and there are real fears of governments’ ability to sustain debt levels.
CKG, Société Générale Absolutely – for a number of reasons. First, while global GDP will slow, corporates will still need to carry out commercial transactions. Second, financial institutions will still need to chase alpha. Third, volatility has picked up, meaning the first two points become more relevant. Fourth, bid-offer spreads have widened, meaning the competitive fall-on-your-sword attitude to capture market share will abate. But finally, for banks that have pressure on balance sheet and capital usage, foreign exchange offers the highest revenue per unit of balance sheet used, and it is scaleable.