FX trade execution: complex and highly fragmented
Andreas Schrimpf, Vladyslav Sushko · RePEc: Research Papers in Economics · 2019
The 2019 Triennial Survey shows that trade execution has undergone rapid change, with more diverse participants, new technologies and increasing complexity. Electronification advanced the fastest in dealer-to-customer trading. Dealers and customers navigated a highly fragmented market by leveraging technology to trade across electronic venues. Aspects of FX intermediation tilted more towards non-banks as new market-makers, albeit brokered by top dealers. Bank dealers continued to attract large flows to their own proprietary liquidity pools. Consequently, even though the market grew bigger as a whole, the share of trading activity 'visible' to the broader market declined.