FX Trade Execution: Complex and Highly Fragmented

13 Pages Posted: 17 Dec 2019

See all articles by Andreas Schrimpf

Andreas Schrimpf

Bank for International Settlements (BIS) - Monetary and Economic Department

Vladyslav Sushko

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: December 8, 2019

Abstract

The 2019 Triennial Survey shows that trade execution has undergone rapid change, with more diverse participants, new technologies and increasing complexity. Electronification advanced the fastest in dealer-to-customer trading. Dealers and customers navigated a highly fragmented market by leveraging technology to trade across electronic venues. Aspects of FX intermediation tilted more towards non-banks as new market-makers, albeit brokered by top dealers. Bank dealers continued to attract large flows to their own proprietary liquidity pools. Consequently, even though the market grew bigger as a whole, the share of trading activity 'visible' to the broader market declined.

JEL Classification: C42, C82, F31, G12, G15

Suggested Citation

Schrimpf, Andreas and Sushko, Vladyslav, FX Trade Execution: Complex and Highly Fragmented (December 8, 2019). BIS Quarterly Review, December 2019, Available at SSRN: https://ssrn.com/abstract=3502877

Andreas Schrimpf (Contact Author)

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Vladyslav Sushko

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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