The biggest foreign exchange banks have formed a new industry group in a sign of the strength of market concern about the impact of new regulations.

The FX markets, where some $3,200bn is traded daily, have typically been lightly overseen by central banks. But sweeping financial reforms currently being debated in Brussels and Washington are expected to include currency derivatives, raising concerns among the banks about how this will affect their businesses and their clients’ ability to use the market.

The new body will be formed as the FX division of the Association for Financial Markets in Europe, in co-operation with its US and Asian sister organisations.

“It has become clear that the industry needed a more mature voice in dealing with legislators,” said Zar Amrolia, head of FX at Deutsche Bank. “This is an important next step in the maturity of the FX market.”

FX volumes are believed to be booming, particularly on the back of the widespread volatility seen last month. On Tuesday, the industry’s settlement system, CLS, reported the latest in a series of record settlement days.

The industry has however come under increasing scrutiny in recent months as turbulence on global financial markets has escalated.

European officials have blamed speculators for an attack on the euro, with Nicolas Sarkozy, the French president, calling for a new Bretton Woods, the fixed exchange rate system the world abandoned 40 years ago.

Meanwhile, some policymakers, such as Adair Turner, chairman of the UK’s Financial Services Authority, have questioned the social benefit of the FX carry trade, a widely used strategy that some argue has increased volatility in financial markets in times of stress.

The newly formed FX Division said it would monitor developments in public policy and regulation that could affect the FX markets, providing a consolidated voice for the industry and would support efforts to promote an efficient global market.

Membership will be open to all sell-side and other strategically significant companies in the FX industry.

Sixteen of the largest FX market participants, which together account for about 85 per cent of the turnover on global currency markets, have already signed up. These include Citigroup, Deutsche Bank and UBS.

AFME has begun recruiting for a managing director to lead the FX Division and plans to be operational by the end of this summer.

“Foreign exchange is the world’s largest over-the-counter market. Management of currency risk is an essential tool for governments, companies and, in some cases, individuals,” said Mark Austen, AFME chief executive.

“An efficiently-functioning FX market is one of the cornerstones of the global economy and needs to play its part in supporting economic recovery and sustainable growth.”


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외환 거래와 관련하여 현재 우리 나라에서는 은행들의 선물환 포지션 규제가 최근 큰 이슈.

유럽에서 먼저 나타난 이같은 행보가 아시아, 그리고 우리 나라에는 어떤 영향을 줄까?
위에서 언급한 협의체에 가입한 외국계 은행들의 서울 지점의 외환 딜링 활동에도 영향을 줄까?