The market is still consolidating in the face of stiff competition: in the US, 75% of FX transactions last year were conducted by only 11 banks, compared with 20 banks in the 1998 BIS survey; and in the UK, only 16 banks were responsible for 75% of the volumes compared with 24 in 1998.
“The German market will be under tremendous margin pressure in the corporate and institutional market because many foreign banks are trying to enter the market, grab market share and place themselves on clients’ bank lists,” says Klaus Hoffmann, head of FX at Commerzbank. “The main way to attract [business] will not only be via expertise and advisory services, but simply through extremely aggressive pricing.”
