Risk-sharing efficiency of FX may be tested, BIS says
Study of FX markets highlights risk concentration amid a handful of top banks and the growth of electronic relationship trading
The resilience of foreign exchange markets could be tested as the role of electronic relationship trading continues to grow amid a series of significant market structure shifts, including the rising role being played by non-bank liquidity providers (NBLPs), the bifurcation of liquidity provision and the decline of prime brokerage, according to a study by the Bank for International Settlements (BIS).
The paper, Downsized FX markets: causes and implications, highlights the underlying reasons for
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