Outsourcing FX: Stacks of currencies are seen at a money changer booth at the financial district in Singapore. Faced with the cost of competing in a world of electronic and algorithmic trading, many banks are outsourcing parts of their foreign exchange businesses. — AFP
FACED with the cost of competing in a world of electronic and algorithmic trading, many banks are outsourcing parts of their foreign exchange businesses, a trend that may cement big lenders’ dominance of global currency trading.
Loose, informal relationships where smaller players rely on bigger peers for the best prices and liquidity have long existed in the US$6.6 trillion-a-day FX market. But as high-tech trading supercharges competition for the fastest speeds and tightest prices, more formal tie-ups are becoming common.
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