FX Volume During the Financial Crisis and Now

Abstract

This special feature looks at trading activity in the foreign exchange (FX) market. By using information from surveys conducted by FX committees around the world as well as settlement data from CLS Bank, I analyze how global FX market activity was affected by the recent financial crisis. I show that FX activity continued to grow during the first year of the crisis but experienced a sharp drop after the Lehman bankruptcy, from which it recovered only slowly. I estimate that global FX activity was around $4.7 trillion a day on average in October 2011, compared with $4.0 trillion reported by the latest triennial central bank survey of foreign exchange activity conducted in April 2010.

JEL Classification: C82, F31, G15