Emerging markets investors are discriminating increasingly between countries, signalling a fundamental shift in approach to the asset class.

From being viewed as the rather uninteresting transfer of low-value payments by migrant workers, the remittance market has captured the attention of the world’s largest banks. 

FX banks are confronted by a series of issues regarding delivery channels, namely which platforms to support, whether they should support all clients equally on all platforms, and how to identify which clients on which platforms are disruptive and/or unprofitable. Mark Pelham explains.

FX markets are back in vogue, with investors looking to emerging markets and online trading for the best gains. 

Charging more for a cross-border payment than a domestic payment in the eurozone is forbidden – but Europe is still awaiting the infrastructure to support euro cross-border payments, in the form of a pan-European automated clearing house.

Could a single European payments area boost Europe’s economy? Wendy Atkins finds out.

Gauging the health of the world’s foreign exchange market is an awkward business, but every three years the Bank for International Settlements takes its pulse as best it can. Edward Russell-Walling reports.
The last time the Bank for International Settlements (BIS) brought out its stethoscope, in 2001, the FX heart was found to be beating rather feebly. But the bank’s latest survey shows it to be pounding. Daily turnover shot up from an average of $1200bn in 2001 to nearly $1900bn this year, according to BIS.
That represented a rise of 57% (36% at constant exchange rates), which was rather more than most anticipated. The consensus had been for closer to $1500bn. “We were all surprised,” admits Mansoor Mohi-uddin, UBS chief currency strategist. “No-one expected the jump to be this much.”

As electronic trading has cemented the commoditisation and wafer-thin margins for FX, banks have created specialist teams to advise, structure and pull down the more sophisticated and lucrative high-margin bespoke deals. Edward Russell-Walling reports.

The link between hedge funds and banks seems obvious, yet if the banks want to make the most of this relationship, they must start offering the kinds of services that the hedge funds are asking for, says Mark Pelham

The extent of automation in FX trading systems has meant that a major market shock would lead to a slow-down in trade rather than meltdown. But it has also increased market volatility. William Essex weighs up the pros and cons.