FX Trade Execution: Complex and Highly Fragmented
13 Pages Posted: 17 Dec 2019
Date Written: December 8, 2019
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: Suggested Citation