The European Central Bank analyses recent developments in the foreign exchange market, considering the effects of consolidation, electronic trading systems and continuous linked settlement on market structures and risk.
The study draws on the latest Bank for International Settlements survey data and interviews with key market participants to reach its conclusions.
It warns of a potential liquidity gap due to a concentration of business among the largest players and a looming over-reliance on electronic trading systems. The impact of private sector risk reducing initiatives such as CLS are also considered.
Download the document now 236Kb PDF