Are big FX banks need a new platform?


The world's largest foreign exchange bank made a mistake, sending prices in a number of electronic platforms and invite everyone to participate. Now, they want to take the control back. How to know whether Oliver, the new bank trading system is touted as the answer. Who is behind it, and whether it will be successful?

This major event in the forex market, but no one wants you to know about it. The six biggest banks in the world of forex is considering a proposal to create a new spot-trading platform exclusively for its own use.

Behind all this vow of silence of the currency market is difficult to know exactly what's going on. Some banks say they are not interested in (or at least, not yet). Some say that they are considering it. Many point the finger at the Deutsche Bank and Reuters as the driving force behind the plans (although they are not quite sure what the plan). Germans strongly deny their alleged role, while Reuters will not comment, even though some bankers say that their technology is there and ready to work.

Some things are more clear. Leading banks have played an important role in creating a system that threatens to bring them more harm than good. In fact, they were sawing off the branch on which it sat. The growth of electronic trading platforms (no one actually knows how many there are) to increase trade the spot market, but at the same time reduced the spreads to the bone. Liquidity is low. Nimble traders use the system in their own interests at the expense of the major liquidity providers.

The intrigue clearly sums up the current state of the currency market. He is riddled with contradictions. Its members know that, even if they do not want to accept this. They will tell you that forex - the largest market in the world, with a daily turnover of more than $ 2 trillion per day. Then they will say that he has a problem of liquidity. If both statements are true, the market should have deep structural flaws that adversely affect its overall performance.

Not surprisingly, the major banks, investing huge sums of money to the establishment of a group of true liquidity providers on this huge market, they want to fix the situation. The question is: Do they take the effort to combine their own liquidity, or they just create another platform, which has a small chance to change anything?

The new solution

The proposed solution perceived liquidity problems - the new platform, which will only have access to large commercial banks. In fact, it is an attempt to restore interbank trade, which has all but disappeared since the introduction of e-commerce in 1993. Prior to this, most major banks usually traded with each other more, more than the market standard volume on the phone or via Reuters. Market sources say that Deutsche Bank manages the initiative.

Deutsche Bank denies that is the driving force behind the initiative, the creation of any platform available only to banks and bank representative said that the bank continues to work closely with many vendors to improve the way it provides and receives liquidity.