The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

FX: Making the best of a bad situation

Determining when a client is in distress is not always a straightforward process – banks and FX platforms need to have processes in place to ensure losses are not compounded.

Increased volatility, extreme market events, the use of algos that can run out of control and ‘flash crashes’ can cause considerable losses to market participants and their underlying clients.

If not managed correctly, they can quickly join the ranks of the distressed.

When a client is under stress, it is not a given that the counterparties will have access to this information in real time and the more that clients diversify their credit providers, the more complex the situation becomes.

If the counterparty is in control of some of the assets affected, this will raise a red flag, but they don’t always have the ability to deny access in real time.

Arjun-Jayaram 160x186 

Arjun Jayaram,
Baton Systems

Baton Systems founder and CEO Arjun Jayaram notes that since most FX traders do not have a sufficiently large balance sheet to book their trades and therefore use the services of an FX prime broker, it is not always obvious when they are in trouble.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree