Are big FX banks need a new platform?

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Although Deutsche Bank would not comment more specifically, and no doubt other banks too, awareness of the potential problems in the spot foreign exchange market was presented Ian O'Flaherty, chief of division of e-commerce for the global exchange of goods and Deutsche Bank, in Euromoney magazine last month. In the article, O'Flaherty said that he considered the electronic market as a pendulum, where the point of balance and side-buying and selling side benefit. But, he added: "The new technology could be introduced to swing the pendulum in favor of the buy side. We'll have to see how it is viable. "

Whoever was behind it, the concept seems to have dignity, to some extent, it mimics the trading platforms large blocks of securities on the stock market. They act mainly as supplementary rather than competitive service offered by the exchanges.

Few of the banks involved is rumored to want to say anything, at least not officially. But if you break through the code of silence market FX, rumors are enough to suggest that the company may be at the time of conception.

Of the eight major banks interviewed for this article, only three are willing to continue to report on the new platform. UBS says he just does not have any plans to take part in this at the present time, HSBC said it is considering and Deutsche Bank denies that manages this.

One of the six main banks of FX rating according to the latest survey Euromoney, published in May 2005, who declined to be named, offered the following comment: "We are studying the proposal made by Reuters. How this would work in practice is not clear, so it would be wrong to assume that we will say yes. The proposal is to create a level-only banks in the market, a closed user group of six banks. This is indicated by people from Deutsche Bank. The idea, it seems, is to eliminate the intermediary function EBS.

This is a strong statement and, not surprisingly, Deutsche Bank denies this, saying that he had no intention of trying to eliminate intermediary function EBS or any other portal that ensures its liquidity. Reuters, which is the only real competitor to the EBS, also not a lot to say on this subject.

Only the receipt of responses was as follows: "The market for FX - an extremely competitive market, and of course for the participants to look for new ways to gain access to the best prices and associations liquidity. Reuters supports the development of the market and happy to work to support the business objectives of its clients. However, Reuters does not comment on market rumors and can not comment on this particular initiative. "

One of the leaders of the U.S. bank based in London, said he spoke with Reuters about the proposal and that the technology to create a platform ready. Reuters, he adds, is actively polling customers about their views in order to assess the viability of the project.

Head of FX units of another major player says, "that's all there was, because EBS opened and allowed the hedge funds to login. Did not like it much, especially Deutsche Bank.