The FX market is under intense scrutiny as regulators around the world investigate allegations of price-rigging and collusion between traders.
The FX market is enormous and oversight is modest. As calls for tighter regulation snowball, questions are being asked about whether a new benchmark is required.
Earlier this year, almost 600 respondents to Euromoney’s FX Survey answered a question about what should replace the FX fix benchmark. The majority of those who answered said the fix should remain the same – to continue using the joint WM Company and Thomson Reuters fix, as the chart shows.
 |
Source: Euromoney Research Group
However, the suggestions from those who did want to see change were wildly different and worthy of note. Furthermore, when the results were sorted by institution type and size, there were some interesting differences.
The second most-popular answer from the total survey was to draw on a system in use elsewhere in financial markets. These ranged from volume- or time-weighted fixes, to one taken from either a particular bank, or a blended rate from several banks.
Various FX trading firms and platforms received votes of confidence, including CME, GTX, Icap-owned EBS and Platts.