Click here to download PDF sample of report

Click here to download PDF sample of report

For the first time since the merger of Bank of America and Merrill Lynch in 2008, the firm is starting to make serious inroads into the Euromoney FX survey. This year it jumps from 10th to seventh place in the overall rankings, with a market share of 4.38%. But this is not a short-term improvement; over the past three years BofA Merrill’s market share has increased by 1.43 percentage points, and its volumes by almost 90%. And its ambitions are far from sated.

The Euromoney Foreign Exchange survey is the most comprehensive quantitative and qualitative annual study available on the FX markets. The FX market is an unregulated OTC market and there are no reliable, aggregated, global statistics made available against which to benchmark the survey outside the BIS studies. The survey also excludes a number of categories of market participant, which means that the total volume reported by the survey is not and not intended to be an accurate reflection of total global foreign exchange activity. Euromoney aims to capture client price-taking activity only and not any interbank/interdealer broking volumes. However, given the geographical and participant-type spread represented by the survey, Euromoney believes that the survey provides an accurate proxy for trends in the major areas of activity polled and accurately discerns the relative performance of the banks ranked, particularly over periods of two or more years.

This year Spanish bank BBVA has risen into the top 25 in the Euromoney survey for the first time. Over the past three years, the bank has risen nine places in the overall rankings and more than doubled its volumes.

Who would be a global head of foreign exchange in a market like this? Most of them are spending the vast majority of their days dealing with investigations, rather than thinking strategically about their business or going out to see clients.

The star performers in the Euromoney global FX survey over the past three years are clearly the big-three Australian banks. Each has been beefing up its presence in FX, and since the financial crisis they have also benefited from maintaining high ratings, which has helped them to win business from real-money clients.

Global FX volume/Global e-FX volume

Global FX volume/Global e-FX volume

The top five global foreign exchange banks have been saying for many years that the banks ranked just outside that top tier are under pressure: they must maintain similar levels of infrastructure in terms of people and technology as the biggest players, but cannot compete on revenues in an ultra-low-margin business.

LatAm continued to account for the 7th greatest volume of e-FX activity in 2013. 1% of global electronic volumes took place in 2013 up from 0.75% in 2012.

NA continued to account for the second greatest volume of e-FX activity in 2013. 27% of global electronic volumes took place in 2013.

FX market users in LatAm continued to account for the 6th greatest volume of FX activity globally:

Standard Chartered has shown steady improvement in the survey over the past three years. Its market share has risen 0.31 percentage points, and its volumes by 64%, propelling the bank to 14th place overall in the global rankings.

Citi reclaims top ranking in benchmark Euromoney Foreign Exchange Survey

Nadir Mahmud smiles at the irony of it. He’s been global head of Citi’s foreign exchange business for only a matter of weeks, and he’s already achieved something that has been a clear ambition of the bank for more than a decade: to reclaim its position as the leading global foreign exchange house.

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The Euromoney Foreign Exchange survey is the most comprehensive quantitative and qualitative annual study available on the FX markets.

The senior FX trader at one of the top-15 banks in this year’s survey smiles grimly at his phone. He has been telling how the bank recently devoted several man-years to compiling and delivering vast files of historical data on FX trades, running to billions of individual items, to one of the US regulatory agencies. It had been sniffing around the market for evidence of banks failing to provide best execution to customers. There is no single source for historical price and trade data in the over-the-counter FX market and so the regulator had approached several large banks to supply it. The banks’ pleas that the regulator was looking in the wrong place for the wrong kind of evidence in a market that had functioned well throughout the financial crisis were dismissed. The regulator wanted the data and the banks would be ill advised to cross it.