What Drives the Growth in FX Activity? Interpreting the 2007 Triennial Survey

10 Pages Posted: 5 Jul 2012 Last revised: 29 Sep 2013

See all articles by Gabriele Galati

Gabriele Galati

De Nederlandsche Bank

Alexandra Heath

Reserve Bank of Australia - Economic Research

Date Written: December 1, 2007

Abstract

The most recent BIS triennial survey shows that turnover in foreign exchange markets increased by more than 70% over the three years to April 2007. Two specific findings stand out. First, the growth in transactions between banks and other financial institutions was particularly strong, consistent with the increasing importance of hedge funds, as well as portfolio diversification by institutional investors with a longer-term horizon, such as pension funds. Second, there has been a marked increase in turnover involving emerging market currencies.

JEL Classification: F31, G15, G20

Suggested Citation

Galati, Gabriele and Heath, Alexandra, What Drives the Growth in FX Activity? Interpreting the 2007 Triennial Survey (December 1, 2007). BIS Quarterly Review, December 2007. Available at SSRN: https://ssrn.com/abstract=1967430

Gabriele Galati (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Alexandra Heath

Reserve Bank of Australia - Economic Research ( email )

GPO Box 3947
Sydney, NSW 2001
Australia

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