Smell the Coffee

Capital Markets have seen significant changes the past few months



When will the finance houses and trading community   “smell the coffee” and admit that recent changes in the Financial Sector have cast a very unflattering light on the working practices and ethics prevalent in the market.As Bloomberg reported in June and subsequently traders from different centres arounf the world have seen  their internal and external communications scrutinised.This has cast a cold gloom over the already depressed sector as falling volumes and thinner margins all compete to make the task of raising profit margins from FX harder and harder.At the time of writing the SEC in the states were the only one who have categorised it as a criminal investigation.Whether this leads to extradition of any individuals involved with americam banks remains to be seen but the spectre of the LIBOR investigations casts a huge shadow over these proceedings.

Information flow has always been a vital cog in the wheel of the FX market and with innovations in technology meaning that the speed and transparency of the flow has been maximised to an optimum level where a key tip here and there can make an unprecedented difference in the timing of the trade undertaken by the trader.The past facilitators of the flow ie Brokers may also have to be looked at as the middlemen in any transactions .The Libor cases showed that with like minded middlemen any abuses were that much easier to commit.This is certainly something that will continue to draw the attention of market participants and regulators for some months to come.

About Hetal Patel - Chief Editor, Europe

Hetal Patel has written 58 post in this blog.