BE BIG -- AND BRIGHT
As the world's foreign exchange markets grow giddy with volatility, there's a delicate but impenetrable curtain being drawn between the banks which are committed market-makers and those which, fearful of the bruising size and unpredictability of today's international currency rates, have opted to secure themselves within the niches they already enjoy. At a time when the dollar can whiplash four or five cents up and down within the same day, only the biggest and bravest spot teams can afford to keep quoting both sides of the market.
That's one of the key findings of this year's poll of corporate treasurers: size is more important than ever. The big banks are confirmed in their positions as price-providers to the world's corporate treasuries; and the ability to keep quoting through all markets is an increasingly prized and voted-for faculty.
The other significant trend indicated by the outcome of the poll runs counter to this. The arrival of Goldman Sachs in the top twenty bank foreign-exchange teams is more than an acknowledgement of the considerable ambitions of the US investment banks to capture foreign exchange business. It's a dramatic example of the collaboration between the capital markets and the foreign exchange markets.